On December 31, 20X1, Carter Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { | l | r | }
\hline \text { Trade receivables } & \$ 25,000 \
\hline \text { Allowance for doubtful accounts } & \$ 200 \text { (credit) } \
\hline \text { Sales revenue (all credit sales) } & \$ 400,000 \
\hline
\end{array}$$ Required: Present 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 $1,950 of the receivables outstanding at year-end will be uncollectible.
B. It is estimated that .5% of credit sales for the year will prove to be uncollectible .
C. Assume the same information presented in (A) above except that prior to adjustment, the Allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.

Question

On December 31, 20X1, Carter Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { | l | r | } 
\hline \text { Trade receivables } & \$ 25,000 \
\hline \text { Allowance for doubtful accounts } & \$ 200 \text { (credit) } \
\hline \text { Sales revenue (all credit sales) } & \$ 400,000 \
\hline
\end{array}$$ Required: Present 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 $1,950 of the receivables outstanding at year-end will be uncollectible.
B. It is estimated that .5% of credit sales for the year will prove to be uncollectible .
C. Assume the same information presented in (A) above except that prior to adjustment, the Allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.

Quizplus · Accepted Answer

The Answer of On December 31, 20X1, Carter Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: $$\begin{array} { | l | r | } 
\hline \text { Trade receivables } & \$ 25,000 \
\hline \text { Allowance for doubtful accounts } & \$ 200 \text { (credit) } \
\hline \text { Sales revenue (all credit sales) } & \$ 400,000 \
\hline
\end{array}$$ Required: Present 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 $1,950 of the receivables outstanding at year-end will be uncollectible.
B. It is estimated that .5% of credit sales for the year will prove to be uncollectible .
C. Assume the same information presented in (A) above except that prior to adjustment, the Allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.

On December 31, 20X1, Carter Corporation Had the Following Account