Capital Masonry has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.
The current balance in Allowance for Doubtful Accounts is a $145 debit.

Question

Capital Masonry has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. 
The current balance in Allowance for Doubtful Accounts is a $145 debit.

Quizplus · Accepted Answer

To calculate the estimated uncollectible accounts, we need to multiply the total Accounts Receivable ($192,000) by the estimated percentage of uncollectible accounts (8%). This gives us an estimated uncollectible amount of $15,360. To find the required adjustment to Allowance for Doubtful Accounts, we need to subtract the current balance ($145) from the estimated uncollectible amount ($15,360), which gives us $15,215. Therefore, the journal entry to record the estimated uncollectible accounts would be a debit to Bad Debt Expense for $15,215 and a credit to Allowance for Doubtful Accounts for $15,215. The total amount of the journal entry is $15,215, which is closest to option B ($1,482).

Capital Masonry Has Given You the Following Information from Its