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25 January, 04:10

Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250.

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  1. 25 January, 05:11
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    Required Adjustment in Allowance for Doubtful Accounts $ 2750 credit

    Explanation:

    Simple Co.

    Credit sales $250,000

    Cost of Goods Sold $150,000

    Allowance for Doubtful Accounts Adjusted Balance$3,000

    Allowance for Doubtful Accounts $250 Credit

    Required Adjustment in Allowance for Doubtful Accounts $ 2750

    As the balance in the Allowance for Doubtful Accounts is $ 250 credit and we need $ 3000 credit by the end of the year the adjustment would be of $ 2750 credit
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