Ask Question
7 July, 08:58

In 2022 the Bramble Corp. had net credit sales of $920000. On January 1, 2022, the Allowance for Doubtful Accounts had a credit balance of $22100. During 2022, $33200 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 5% of the balance in receivables (percentage-of-receivables basis). If the accounts receivable balance at December 31 was $232000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2022

+3
Answers (1)
  1. 7 July, 09:06
    0
    The required adjustment to the allowance for doubtful account is $22,700

    Explanation:

    Provision for doubtful debt is an amount usually set aside by the management of an organization against the likely hood of debtors not paying their debt. It is a reduction in accounts receivable in the balance sheet.

    Solution;

    Adjustment is therefore=

    $33,200 - $22,100 + ($232,000 * 5%)

    $33,200 - $22,100 + $11,600

    $22,700

    It is to be noted that last year estimate would be discounted, while write off during the year is added to the period end estimate.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In 2022 the Bramble Corp. had net credit sales of $920000. On January 1, 2022, the Allowance for Doubtful Accounts had a credit balance of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers