Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 2

Pachel Corporation reports the following information pertaining to its accounts receivable:
The company's credit department provided the following estimates regarding the percent of accounts expected to eventually be written off from each category listed above:
The company uses a balance sheet approach to estimate credit losses.
a. Record the company's uncollectible accounts expense, assuming it has a $1,400 credit balance in its Allowance for Doubtful Accounts prior to making the necessary adjustment.
b. Record the company's uncollectible accounts expense, assuming it has a $1,600 debit balance in its Allowance for Doubtful Accounts prior to making the necessary adjustment.