Question

g Assume that Fan-Tastic Sports Gear Inc. used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2,240. The company estimated uncollectible accounts expense using the percent of credit sales method and expected 0.75% of credit sales to be uncollectible. What is the amount of the adjusting entry to provide for doubtful accounts on December 31

Answer 1

Answer: $16,275‬

Step-by-step explanation:

The amount for the adjusting entry to provide for doubtful accounts at year end is;

= Credit sales * Percentage of accounts expected uncollectible

= ( 3,100,000 * 70%) * 0.75%

= $16,275‬