At the End of the Current Year, the Trial Balance

question 12

Short Answer

At the end of the current year, the trial balance of Bianca's Exports included the accounts and balances shown below. Credit sales were $9,200,000. Returns and allowances on these sales were
$55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 4 percent of accounts receivable.
Accounts Receivable $ 1,960,000 Dr.
Allowance for Doubtful Accounts 8,300 Cr.
Sales 14,000,000 Cr.
Sales Returns and Allowances 110,000 Dr.
1. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?
2. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted?

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Definitions:

Progressive Tax

Places greater burden on those with best ability to pay and little or no burden on the poor (for example, federal personal income tax).

Proportional Tax

A tax whose burden falls equally among the rich, the middle class, and the poor.

Regressive Tax

A taxation system where the tax rate decreases as the taxable amount increases, leading to a higher tax burden on lower-income individuals relative to higher-income individuals.

Progressive Tax

A tax system where the tax rate increases as the taxable amount or income increases, placing a larger burden on those who have the ability to pay more.