The Allowance for doubtful debts account has a credit balance of $8500 before the adjusting entry for bad debt expense.After analysing the accounts in the accounts receivable subsidiary ledger using the ageing method,the company's management estimates that uncollectable accounts will be $14,500.What will be the balance of the Allowance for doubtful debts reported on the balance sheet?
A)$6000
B)$13,050
C)$23,000
D)$14,500

Question

Quizplus · Accepted Answer

The balance of the Allowance for doubtful debts should be adjusted to the estimated uncollectable amount of $14,500 as per the ageing method analysis.

The Allowance for Doubtful Debts Account Has a Credit Balance