Teller Inc. reported an allowance for doubtful accounts of $30,000 (credit) at December 31, 2011, before performing an aging of accounts receivable. As a result of the aging, Teller Inc. determined that an estimated $52,000 of the December 31, 2011, accounts receivable would prove uncollectible. The adjusting entry required at December 31, 2011, would be
A) Doubtful Accounts Expense ........... 22,000 Allowance for Doubtful Accounts ... 22,000
B) Allowance for Doubtful Accounts ..... 22,000 Accounts Receivable ............... 22,000
C) Doubtful Accounts Expense ........... 52,000 Allowance for Doubtful Accounts ... 52,000
D) Allowance for Doubtful Accounts ..... 52,000 Doubtful Accounts Expense ......... 52,000

Question

Quizplus · Accepted Answer

The existing allowance is $30,000, but $52,000 is needed. Therefore, an additional $22,000 is required to adjust the allowance for doubtful accounts to the estimated uncollectible amount.