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What amount would have been used in the year-end adjustment

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Question - Accounts receivable allowance method of accounting for bad debts

Duncan Company's year-end trial balance shows accounts receivable of $89,000, allowance for doubtful ac-counts of $500 (credit), and net credit sales of $270,000. Uncollectibles are estimated to be 1.5% of outstanding accounts receivable.

a. Prepare the December 31 year-end adjustment.

b. What amount would have been used in the year-end adjustment had the allowance account had a year-end debit balance of $200?

c. Assume the same facts, except that Duncan estimates uncollectibles as 1% of net credit sales. What amount would be used in the adjustment?

Reference no: EM132567365

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