A company has $316,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $1,896 debit balance. If the company estimates that $8,160 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 correct amount is $10,056. This is calculated by adding the existing debit balance in the Allowance for Doubtful Accounts ($1,896) to the newly estimated uncollectible amount ($8,160). This adjustment ensures the allowance account reflects the total estimated uncollectibles.

A Company Has $316,000 in Credit Sales