On December 31, 2014, prior to adjustments, Accounts Receivable has a debit balance of $356,000 and the Allowance for Doubtful Accounts has a debit balance of $1,200. The firm estimates its losses from uncollectible accounts to be 4% of accounts receivable at the end of the year. The amount of the adjusting entry needed to record the estimated losses from uncollectible accounts is

Question

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The estimated uncollectible accounts are 4% of $356,000, which is $14,240. Since the Allowance for Doubtful Accounts has a debit balance of $1,200, the adjusting entry needed is $14,240 + $1,200 = $15,440.

On December 31, 2014, Prior to Adjustments, Accounts Receivable Has