Compute the Ending Balance in the Allowance for Doubtful Accounts

question 60

Short Answer

Compute the ending balance in the allowance for doubtful accounts after the adjusting entries have been prepared for the following independent situations.
a)Credit balance in allowance for doubtful accounts is $500 before adjustment. An aging schedule indicates $3,500 of accounts receivables are uncollectible.
b)Debit balance in allowance for doubtful accounts is $700 before adjustment. An aging schedule indicates $4,300 of accounts receivables are uncollectible.
c)Credit balance in allowance for doubtful accounts is $500 before adjustment. Net credit sales for the current year are $325,000 and 1% is considered uncollectible.
d)Debit balance in allowance for doubtful accounts is $700 before adjustment. Net credit sales for the current year are $350,000 and 1.25% is considered uncollectible.

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Definitions:

Marginal Means

The average value of a variable at each level of another variable, often used in the analysis of variance.

Main Effect

The direct impact of an independent variable on a dependent variable, ignoring other potential influencing factors.

Significant

In statistics, it refers to results that are unlikely to have occurred by chance alone, according to a predefined threshold of probability (the significance level).

Marginal Means

The means of subsets of data, taking into account the influence of one or more other variables.