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.

---

Definitions:

Absolute Pitch

The ability to identify or recreate a musical note without any reference pitch.

Early Childhood

A developmental period from birth to eight years of age, characterized by rapid physical, cognitive, and emotional growth.

Vestibular System

The sensory system that contributes to balance and spatial orientation, located in the inner ear.

Head Position

The orientation or angle of the head in relation to the body, which can influence perception, balance, and communication.