A company has $294,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $2,210 credit balance. If the company estimates that $7,640 of accounts will be uncollectible based on an aging of Accounts Receivable, what will be the amount of the journal entry to record estimated uncollectible accounts?

Question

Quizplus · Accepted Answer

The amount of the journal entry to record estimated uncollectible accounts is the difference between the new estimate ($7,640) and the existing credit balance in the Allowance for Doubtful Accounts ($2,210), which is $7,640 - $2,210 = $5,430.

A Company Has $294,000 in Credit Sales