Charmed,Inc.had credit sales for the period of $142,000.The balance in Allowance for Doubtful Accounts is a debit of $643.If Charmed ages Accounts Receivable and determines estimated uncollectible accounts to be $2,840,what is the required journal entry to record estimated uncollectible accounts?

Question

Quizplus · Accepted Answer

To record estimated uncollectible accounts, we need to increase the allowance for doubtful accounts by the estimated amount.

The current balance in the Allowance for Doubtful Accounts is a debit of $643.

The estimated uncollectible accounts are $2,840.

So, to increase the allowance by $2,840 - $643 = $2,197, we need to debit Bad Debt Expense and credit Allowance for Uncollectible Accounts by $2,197.

Therefore, the required journal entry is:

Debit Bad Debt Expense $3,483 
Credit Allowance for Uncollectible Accounts $3,483

Thus, the correct choice is C.