Question

Using the percentageminusofminussales ​method, the estimated total uncollectible accounts are $ 6,622. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $ 2,635. The Accounts Receivable balance is $ 44,720. The amount of the adjusting entry for UncollectibleminusAccounts Expense​ is:

Answer 1

Uncollectible Accounts Expense​ $ 9257

Step-by-step explanation:

Accounts Receivable balance $ 44,720

The estimated total uncollectible accounts $ 6,622.

Unadjusted Allowance for Uncollectible Accounts 2,635 Dr.

Adjustment Required ( $ 6,622+ 2,635)= $ 9257

Adjusted Allowance for Uncollectible Accounts $ 9257 Cr

The Allowance for Uncollectibles must always have a credit balance . As we have a debit balance we add it to get the required credit balance adjusting amount.

The amount of the adjusting entry for

Uncollectible Accounts Expense​ is $ 9257

and the entry is

Bad debts Expense $ 9257 Dr.

Allowance for Uncollectibles $ 9257 Cr.

Answer 2

Debit Bad debt expense $9,257

Credit Allowance for doubtful accounts $9,257

(To record bad debt expense during the year)

So the amount of adjusting entry is $9,257.

Step-by-step explanation:

The estimated total uncollectible amount was given as $6,622 meanwhile the company had a debit balance of $2,635 prior to the adjustment. This means $2,635 would be added to $6,622 to arrive at $9,257. That amount would serve as the adjusting amount in order to reinstate the balance in the allowance for doubtful accounts to $6,622.

So net realizable value of accounts receivable would be $38,098 ($44,720 - $6,622).