Question

A company has​ $294,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a​ $2,210 credit balance. If the company estimates that​ $7,640 of accounts will be uncollectible based on an aging of Accounts​ Receivable, what will be the amount of the journal entry to record estimated uncollectible​ accounts

Answer 1

The correct answer to the given question is $5430.

Step-by-step explanation:

Allowance method can be defined as a method which is used by the companies to adjust un collectible accounts receivables , which appears on the balance sheet in the accounting period as sales.

Given information-

Credit balance in allowance for doubtful debt - $2210

Uncollectible amount as per company estimates - $7640

Amount in uncollectible account - $7640 - $2210

= $ 5430.