Nevada Wolf,Inc.determined at the end of the year that estimated uncollectible accounts was $50,000.If the Allowance for Doubtful Accounts currently has an unadjusted debit balance of $10,000,what is the amount of bad debts to be recorded at the end of the year?
A)$55,000
B)$50,000
C)$40,000
D)$60,000

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts had an unadjusted debit balance of $10,000;an adjustment is required to increase the balance to a credit of $50,000.The related adjusting entry includes a debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $60,000 (or desired credit balance of $50,000 + unadjusted debit balance of $10,000).