Using the aging-of-accounts-receivable method, you estimate that total uncollectible accounts are $3,800. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of
$1,100. The amount of the adjusting entry should be:

Question

Quizplus · Accepted Answer

The adjusting entry should bring the Allowance for Uncollectible Accounts balance to the estimated amount of uncollectible accounts, which is $3,800.

Since the Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $1,100, the adjusting entry should increase the credit balance to $3,800.

Therefore, the amount of the adjusting entry should be $2,700 ($3,800 - $1,100).

Thus, the correct choice is D.

Using the Aging-Of-Accounts-Receivable Method, You Estimate That Total Uncollectible Accounts