Balance sheet method-journal entries
The general ledger controlling account for Accounts Receivable has a balance of $120,500 at year-end before adjustment. The company uses the balance sheet approach to estimate uncollectible accounts. By aging the individual customers' accounts, it was determined that the impairment amounted to $5,020. Prepare the year-end adjusting entry for uncollectible accounts under each of the following independent assumptions.
(a.) Allowance for Impairment has a credit balance of $2,850.
(b.) Allowance for Impairment has a debit balance of $925.

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The general ledger controlling account for Accounts Receivable has a balance of $120,500 at year-end before adjustment. The company uses the balance sheet approach to estimate uncollectible accounts. By aging the individual customers' accounts, it was determined that the impairment amounted to $5,020. Prepare the year-end adjusting entry for uncollectible accounts under each of the following independent assumptions.
(a.) Allowance for Impairment has a credit balance of $2,850.
(b.) Allowance for Impairment has a debit balance of $925.

Balance Sheet Method-Journal Entries