On December 31, 2014, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { l c }
\text { Accounts receivable } & \$ 25,000 \
\text { Allowance for doubtful accounts } & 200 \text { credit balance } \
\text { Sales revenue (all credit sales) } & 400,000
\end{array}$$ Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions:
A. An aging of accounts receivable is completed. It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
A. except that prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
B. Assume the same information presented in part
C. It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

Question

On December 31, 2014, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { l c } 
\text { Accounts receivable } & \$ 25,000 \
\text { Allowance for doubtful accounts } & 200 \text { credit balance } \
\text { Sales revenue (all credit sales) } & 400,000
\end{array}$$ Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions: 
A. An aging of accounts receivable is completed. It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
A. except that prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
B. Assume the same information presented in part
C. It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

Quizplus · Accepted Answer

The Answer of On December 31, 2014, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { l c } 
\text { Accounts receivable } & \$ 25,000 \
\text { Allowance for doubtful accounts } & 200 \text { credit balance } \
\text { Sales revenue (all credit sales) } & 400,000
\end{array}$$ Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions: 
A. An aging of accounts receivable is completed. It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
A. except that prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
B. Assume the same information presented in part
C. It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

On December 31, 2014, Colonial Corporation Had the Following Account