On December 31, 2016, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions:
A.An aging of accounts receivable is completed.It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
B.Assume the same information presented in part A above except that, prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
C.It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

Question

On December 31, 2016, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:  Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions: 
A.An aging of accounts receivable is completed.It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
B.Assume the same information presented in part A above except that, prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
C.It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

Quizplus · Accepted Answer

The Answer of On December 31, 2016, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:  Required:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions: 
A.An aging of accounts receivable is completed.It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
B.Assume the same information presented in part A above except that, prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
C.It is estimated that a provision for bad debts is required for 1% of credit sales for the year.

On December 31, 2016, Colonial Corporation Had the Following Account