A firm reported sales of $460,000 for the year. Prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $560. Based on an aging of accounts receivable, the firm estimated its losses from uncollectible accounts to be $6,460.
-The balance in the Allowance for Doubtful Accounts after adjustment is:

Question

A firm reported sales of $460,000 for the year. Prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $560. Based on an aging of accounts receivable, the firm estimated its losses from uncollectible accounts to be $6,460. 
-The balance in the Allowance for Doubtful Accounts after adjustment is:

Quizplus · Accepted Answer

The balance in the Allowance for Doubtful Accounts after adjustment should reflect the estimated uncollectible accounts, which is $6,460. Since there is already a credit balance of $560, the adjustment needed is $5,900 ($6,460 - $560), resulting in a final balance of $6,460.

A Firm Reported Sales of $460,000 for the Year