Allegheny Company ended 2015 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $23,000 and $900,respectively.During 2016,Allegheny wrote off $1,500 of Uncollectible Accounts.After aging its receivables,Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $1,600.What will Allegheny report as Uncollectible Accounts Expense on its 2016 income statement?
A)$2,200
B)$1,500
C)$700
D)$1,600

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Accounts needs to be adjusted from a $900 credit balance to a $1,600 credit balance. After writing off $1,500, the balance becomes a $600 debit. To reach a $1,600 credit, an adjustment of $2,200 is needed, which is reported as Uncollectible Accounts Expense.

Allegheny Company Ended 2015 with Balances in Accounts Receivable and Allowance