Piper,Inc.had credit sales for the period of $85,000.The balance in Allowance for Doubtful Accounts is a debit of $817.What is the credit to Allowance for Doubtful Accounts if Piper uses the aging method to estimate uncollectible accounts and an aging of Accounts Receivable reflected an estimated amount of uncollectible accounts of $6,342?

Question

Quizplus · Accepted Answer

Using the aging method to estimate uncollectible accounts involves calculating the estimated amount of uncollectible accounts based on how long the accounts have been outstanding. The credit to the Allowance for Doubtful Accounts will be the difference between the current balance and the estimated amount of uncollectible accounts. 
Current balance in Allowance for Doubtful Accounts = $817 (debit)
Estimated amount of uncollectible accounts using aging method = $6,342
Credit to Allowance for Doubtful Accounts = $6,342 - $817 = $7,159
Therefore, the best choice is A.

Piper,IncHad Credit Sales for the Period of $85,000