Question

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year, and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000. Compute the adjusted balance in the allowance for doubtful accounts?a.$15,000b.$14,500c.$14,000d.$15,500

Answer 1

a.$15,000

Step-by-step explanation:

To compute the adjusted balance in the allowance for doubtful accounts we have to find out the bad debt expense which is shown below:

= Allowance for Doubtful accounts - unadjusted balance

= $15,000 - $500

= $14,500

Now the adjusted balance would be

= Adjusted bad debt expense + unadjusted balance

= $14,500 + $500

= $15,000