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A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: (3 points)

Debit Credit
Cash sales……………………………………………….. $188,000
Credit sales……………………………………………… 275,000
Accounts receivable…………………………………….. $76,000
Allowance for doubtful accounts……………………….. 1,000
Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

User Nikos
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1 Answer

10 votes

Answer:

Particulars Amount

Provision for uncollectible $6,080 ($76000*8%)

Less: Provision already made $1,000

Provision to be made $5,080

Date Particulars Debit Credit

31-Dec Bad Debts $5,080

To Allowance for Doubtful Accounts $5,080

(Being the adjusting entry to estimate bad debts)

User Gerlinde
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