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25 September, 19:30

Using the percentage-of-sales method, the estimated total uncollectible accounts are $6,722. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $2,835. The Accounts Receivable balance is $44,520. The amount of the adjusting entry for Uncollectibleminus-Accounts Expense is:

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  1. 25 September, 19:33
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    The amount of the adjusting entry for uncollectible amount is $9,557.

    Explanation:

    The percentage-of-sales method resulted in an estimated total uncollectible accounts are $6,722. This is what is expected as the balance in the Allowance for doubtful accounts. Since the allowance account has a debit balance of $2,835, the bad debt expense to be adjusted for is $6,722 + $2,835 = $9,557 and the appropriate journals will be:

    Debit Bad debt expense $9,557

    Credit Allowance for doubtful accounts $9,557

    (To record bad debt expense)

    The net realizable value of the Accounts receivable becomes $44,520 - $6,722 = $37,798
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