On December 31, 2012, ABC Inc. has an accounts receivable balance of $300,000 before any year-end adjustments. The allowance for doubtful accounts has a $10,000 credit balance. The company prepares the following aging schedule for accounts receivable:
Based on the aging of accounts receivable, is the unadjusted balance of the allowance account adequate? Why or why not? Journalize the entry required by the aging schedule.

Question

On December 31, 2012, ABC Inc. has an accounts receivable balance of $300,000 before any year-end adjustments. The allowance for doubtful accounts has a $10,000 credit balance. The company prepares the following aging schedule for accounts receivable:
  Based on the aging of accounts receivable, is the unadjusted balance of the allowance account adequate? Why or why not? Journalize the entry required by the aging schedule.

Quizplus · Accepted Answer

The Answer of On December 31, 2012, ABC Inc. has an accounts receivable balance of $300,000 before any year-end adjustments. The allowance for doubtful accounts has a $10,000 credit balance. The company prepares the following aging schedule for accounts receivable:
  Based on the aging of accounts receivable, is the unadjusted balance of the allowance account adequate? Why or why not? Journalize the entry required by the aging schedule.