Marston Company has outstanding accounts receivable totaling €6.5 million as of December 31 and sales on credit during the year of €24 million.There is also a credit balance of €12,000 in the allowance for doubtful accounts.After aging its receivables,the company estimates that 2% of its credit sales will be uncollectible.What will be the balance for the Allowance for Uncollectible Accounts after the year-end adjustment is made to record bad debt expense?

Question

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The estimated uncollectible amount is 2% of €24 million, which is €480,000. Adding the existing credit balance of €12,000 in the allowance for doubtful accounts, the balance after adjustment will be €492,000.

Marston Company Has Outstanding Accounts Receivable Totaling €6