Benson Products Uses the Allowance Method in Estimating Uncollectible Accounts

question 54

Essay

Benson Products uses the allowance method in estimating uncollectible accounts. On December 31, 2014, the balance in Accounts Receivable was $650,000. An aging analysis of the accounts receivable indicated that $29,500 in accounts are expected to be uncollectible.
Prepare the adjusting entry to record estimated bad debts expense using the percentage of receivables basis under each of the following independent assumptions:
(a) Allowance for Doubtful Accounts has a credit balance of $3,000 before adjustment.
(b) Allowance for Doubtful Accounts has a debit balance of $830 before adjustment.

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Definitions:

Nonverbal Communication

The process of conveying messages or signaling information through means other than verbal words, such as body language or facial expressions.

Indirect Benefit

An advantage or positive outcome that is not the direct result of an action or policy, often realized over time or through secondary effects.

Insight

The ability to gain an accurate and deep understanding of a person, topic, or thing, often leading to a breakthrough or discovery.

Practicing Delivery

Refers to the repetitive execution or rehearsal of presenting information or a performance to improve skill and confidence.