Putnam Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $1,400,000 and $70,000 (Cr.), respectively. An aging of accounts receivable indicated that $118,000 are expected to become uncollectible. The amount of the adjusting entry for bad debts at December 31 is

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The Allowance for Doubtful Accounts balance needs to be adjusted to reflect the expected amount of uncollectible accounts. The current balance is $70,000 (Cr.) and based on the aging analysis, an additional allowance of $48,000 ($118,000 - $70,000) is needed. Therefore, the adjusting entry for bad debts at December 31 is $48,000, which will increase the Allowance account to $118,000 (Cr.).

Putnam Company's Account Balances at December 31 for Accounts Receivable