Ask Question
1 November, 18:52

On December 31, 2019 before adjusting entries, Accounts Receivable for California Company had a debit balance of $200,000, and the Allowance for Doubtful Accounts had a credit balance of $6,000. Credit sales for the year were $1,600,000.

If credit losses are estimated at 1% of credit sales:

a. The balance of the Allowance for Doubtful Accounts will be $10,000 after adjustment.

b. The balance of the Allowance for Doubtful Accounts will be $22,000 after adjustment.

c. The balance of the Allowance for Doubtful Accounts will be $16,000 after adjustment.

d. Bad Debts Expense for the year will be $22,000.

+3
Answers (1)
  1. 1 November, 19:12
    0
    Allowance for doubtful debts account:

    Opening balance: $6,000

    Add adjustments in the year?

    Closing balance = 1% x $1,600,000 = $16,000

    Adjustment in the year is $10,000

    Balance closing the year is $16,000

    Answer is C
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On December 31, 2019 before adjusting entries, Accounts Receivable for California Company had a debit balance of $200,000, and the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers