Lester Company Uses the Allowance Method and Estimates Its Bad-Debt

question 59

Multiple Choice

Lester Company uses the allowance method and estimates its bad-debt expense based on aging the receivables. Before the adjusting entry, the allowance for doubtful accounts had a $425 debit balance. Based on aged receivables, Lester estimates that $3,700 will probably prove uncollectible. What is the amount of the adjusting journal entry that Lester should make?

• A)$3,700
• B)$3,275
• C)$4,125
• D)$425

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