Using Its Aging of Accounts Receivable,Age Old,Inc

question 1

Multiple Choice

Using its aging of accounts receivable,Age Old,Inc.estimates that $90,000 of its $4,000,000 of accounts receivable will be uncollectible.Prior to making its adjusting entry,the unadjusted Allowance for Doubtful Accounts has a credit balance of $1,000.After the adjustment,the:

• A)Allowance for Doubtful Accounts will have a $90,000 credit balance.
• B)Allowance for Doubtful Accounts will have an $89,000 credit balance.
• C)Allowance for Doubtful Accounts will have a $91,000 credit balance.
• D)Bad Debt Expense will equal $90,000.

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