Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250.

Question

Makaila Freeman

Business

2 October, 01:20

Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250.

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Bria Cantu · Answer 1

Required Adjustment in Allowance for Doubtful Accounts $ 2750 credit

Explanation:

Simple Co.

Credit sales $250,000

Cost of Goods Sold $150,000

Allowance for Doubtful Accounts Adjusted Balance$3,000

Allowance for Doubtful Accounts $250 Credit

Required Adjustment in Allowance for Doubtful Accounts $ 2750

As the balance in the Allowance for Doubtful Accounts is $ 250 credit and we need $ 3000 credit by the end of the year the adjustment would be of $ 2750 credit