At the end of a period (before adjustment), Allowance for Doubtful Accounts has a debit balance of $2,000. The Accounts Receivable balance is analyzed by aging the accounts, and the amount estimated to be uncollectible is $15,000. The amount to be recorded in the adjusting entry for the bad debt expense is $15,000.

Question

At the end of a period  (before adjustment), Allowance for Doubtful Accounts has a debit balance of $2,000. The Accounts Receivable balance is analyzed by aging the accounts, and the amount estimated to be uncollectible is $15,000. The amount to be recorded in the adjusting entry for the bad debt expense is $15,000.

Quizplus · Accepted Answer

The adjusting entry for bad debt expense should be $17,000, which is the $15,000 estimated to be uncollectible plus the existing $2,000 debit balance in the Allowance for Doubtful Accounts to bring the total allowance to the required $15,000.

At the End of a Period (Before Adjustment), Allowance