Question

Allowance for Doubtful Accounts has a debit balance of $441 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 3% of sales. If net credit sales are $903,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is a.$26,649 b.$27,531 c.$27,090 d.$441

Answer 1

Answer: $27,090

Step-by-step explanation:

From the question, we are informed that the allowance for doubtful accounts has a debit balance of $441 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of sales and that the net credit sales are $903,000.

The amount of the adjusting entry to record the estimate of the uncollectible accounts will be 3% of $903,000. This will be:

= 3% × $903,000

= 3/100 × $903,000

= 0.03 × $903,000

= $27,090