Question

Sunland Company's account balances at December 31, 2020 for Accounts Receivable and the related Allowance for Doubtful Accounts are $924000 debit and $1970 credit, respectively. From an aging of accounts receivable, it is estimated that $40900 of the December 31 receivables will be uncollectible. The necessary adjusting entry would include a credit to the allowance account for:_______

a. $42870.
b. $1970.
c. $38930.
d. $40900.

Answer 1

c. $38930

Step-by-step explanation:

Calculation for what the necessary adjusting entry would include a credit to the allowance account for:

Using this formula

Credit to the allowance account =Accounts receivable-Allowance for Doubtful Accounts (Credit)

Let plug in the formula

Credit to the allowance account=$40900-$1970

Credit to the allowance account= $38930

Therefore The necessary adjusting entry would include a credit to the allowance account for $38930