A company performs the aging of accounts receivable calculation and arrives at an estimate for uncollectible accounts of $800. If Allowance for Uncollectible Accounts has a debit balance of $300 prior to the year-end adjustment, for how much should the adjustment be journalized?

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The adjustment should bring the balance of the Allowance account to its estimated balance of $800. Since the account currently has a debit balance of $300, the adjustment needs to be a credit for $1,100 ($800 - $300) to arrive at the estimated balance. Therefore, the journal entry should be a credit to Allowance for Uncollectible Accounts for $1,100 and a debit to Bad Debt Expense for $1,100.

A Company Performs the Aging of Accounts Receivable Calculation and Arrives