On December 31, 2019, prior to adjustments, Accounts Receivable has a debit balance of $256,000 and the Allowance for Doubtful Accounts has a credit balance of $1,600. The firm estimates its losses from uncollectible accounts to be 5% of accounts receivable at the end of the year. The balance in the Allowance for Doubtful Accounts after the adjusting entry for the estimated losses from uncollectible accounts is:
A)$12,800
B)$12,100
C)$11,200
D)$14,400

Question

Quizplus · Accepted Answer

The correct answer is A. The balance in the Allowance for Doubtful Accounts after the adjusting entry for the estimated losses from uncollectible accounts is $12,800. This is calculated by multiplying the accounts receivable balance by the estimated percentage of uncollectible accounts, which is 5%. $256,000 * 5% = $12,800.

On December 31, 2019, Prior to Adjustments, Accounts Receivable Has