Use the following information for questions: $$\begin{array} { l c c }
\text { Days outstanding } & \text { Balance } & \text { Estimated percentage uncollectible } \
0 - 30 \text { days } & \$ 350,000 & 1 \% \
31 - 60 \text { days } & 275,000 & 2 \% \
61 - 90 \text { days } & 67,500 & 5 \% \
\text { over } 90 \text { days } & 37,500 & 25 \%
\end{array}$$ The balance in their allowance for doubtful accounts before year-end adjustments is a $2,000 credit.
-The balance in the allowance for doubtful accounts after year-end adjustments will be:
A)$2,000.
B)$23,750.
C)$21,750.
D)$19,750.

Question

Use the following information for questions: $$\begin{array} { l c c } 
\text { Days outstanding } & \text { Balance } & \text { Estimated percentage uncollectible } \
0 - 30 \text { days } & \$ 350,000 & 1 \% \
31 - 60 \text { days } & 275,000 & 2 \% \
61 - 90 \text { days } & 67,500 & 5 \% \
 \text { over } 90 \text { days } & 37,500 & 25 \%
\end{array}$$ The balance in their allowance for doubtful accounts before year-end adjustments is a $2,000 credit.
-The balance in the allowance for doubtful accounts after year-end adjustments will be:
A)$2,000.
B)$23,750.
C)$21,750.
D)$19,750.

Quizplus · Accepted Answer

The total estimated uncollectible amount is calculated as follows: (1% of $350,000) + (2% of $275,000) + (5% of $67,500) + (25% of $37,500) = $3,500 + $5,500 + $3,375 + $9,375 = $21,750. Since there is already a $2,000 credit balance, the adjustment needed is $21,750 - $2,000 = $19,750. Thus, the balance after adjustment is $21,750.

Use the Following Information for Questions The Balance in Their Allowance for Doubtful Accounts Before Year-End