Question

An estimate based on an analysis of receivables shows that $790 of accounts receivables are uncollectible. the allowance for doubtful accounts has a debit balance of $120. the adjusting entry at the end of the year will include a credit to allowance for doubtful accounts in the amount of:

Answer 1

The adjusting entry at the end of the year will include a credit to allowance for doubtful accounts in the amount of $910.

Step-by-step explanation:

Allowance for Doubtful Accounts balance should be Credit balance, Since we have $120 debit balance and want to create $790 Allowance for Doubtful Accounts credit balance we have to credit Allowance for Doubtful Accounts by ($790 + $120 = $910) to get Allowance for Doubtful Accounts $790 Credit balance.

Therefore, The adjusting entry at the end of the year will include a credit to allowance for doubtful accounts in the amount of $910.