At the end of the current year, the trial balance of Tracey's Consulting Services included the accounts and balances shown below. Credit sales were $90,000. Returns and allowances on these sales were
$1,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales.

1. What is the estimated loss from uncollectible accounts for the current year?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Question

At the end of the current year, the trial balance of Tracey's Consulting Services included the accounts and balances shown below. Credit sales were $90,000. Returns and allowances on these sales were
$1,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales.
  
1. What is the estimated loss from uncollectible accounts for the current year?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Quizplus · Accepted Answer

The Answer of At the end of the current year, the trial balance of Tracey's Consulting Services included the accounts and balances shown below. Credit sales were $90,000. Returns and allowances on these sales were
$1,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales.
  
1. What is the estimated loss from uncollectible accounts for the current year?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

At the End of the Current Year, the Trial Balance