Balance sheet approach to estimate uncollectible accounts

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Reference no: EM131261488

Rainbow Company uses the balance sheet approach to estimate uncollectible accounts. By aging the customers' accounts, it was estimated that $7,325 of the company's month-end accounts receivable would prove to be uncollectible. Determine the amount that should be debited to the Uncollectible Accounts Expense account in the month-end adjusting entry under each of the following independent assumptions:

(a) Before making any adjustment, the Allowance for Doubtful Accounts has a $785 credit balance. $________________

(b) Before making any adjustment, the Allowance for Doubtful Accounts has a debit balance of $620. $________________

Reference no: EM131261488

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