The data below is for Music Corporation for 2016. $$\begin{array} { l r }
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what is the balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment?
A) $8,000
B) $8,100
C) $8,900
D) $9,600

Question

The data below is for Music Corporation for 2016. $$\begin{array} { l r } 
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what is the balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment?
A) $8,000
B) $8,100
C) $8,900
D) $9,600

Quizplus · Accepted Answer

The balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment would be the amount estimated based on the aging analysis, which is $9,600. This is because, under the aging approach, the ending balance in the allowance account is directly adjusted to match the estimated uncollectible accounts, regardless of the beginning balance or the amounts written off during the year.

The Data Below Is for Music Corporation for 2016 -Refer to the Data for Music Corporation