Question

An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $3,410. The allowance for uncollectible accounts prior to adjustment has a credit balance of $500. The accounts receivable balance is $44,820. The amount of the adjusting entry for uncollectible accounts should be for:

a. $500
b. $3,910
c. $2,910
d. $3,410

Answer 1

The adjusting entry for uncollectible accounts is calculated by subtracting the existing credit balance of the allowance account from the total estimated uncollectibles, resulting in an adjustment of $2,910.

Step-by-step explanation:

The student's question pertains to calculating the adjusting entry for uncollectible accounts. Based on the aging-of-accounts-receivable, the amount of uncollectible accounts is $3,410. Given that the Allowance for Uncollectible Accounts already has a credit balance of $500, we need to determine the additional amount required to adjust the allowance to the total estimated uncollectibles of $3,410.

To find the adjusting entry, subtract the existing credit balance in the allowance account from the estimated total uncollectibles:$3,410 (estimated uncollectibles) - $500 (existing credit balance) = $2,910This means that the adjusting entry for uncollectible accounts should be $2,910 to bring the Allowance for Uncollectible Accounts to the correct balance as indicated by the aging report.