At the End of the Current Year, the Trial Balance

question 7

Short Answer

At the end of the current year, the trial balance of Johannes' Sporting Goods Shop included the accounts and balances shown below. Credit sales were $220,000. Returns and allowances on these sales were $4,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 3 percent of accounts receivable.
Accounts Receivable $ 63,000 Dr.
Allowance for Doubtful Accounts 600 Dr.
Sales 390,000 Cr.
Sales Returns and Allowances 6,000 Dr.
1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

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Definitions:

Gastrosplenic Vein

A blood vessel that drains blood from the stomach and spleen, typically emptying into the portal vein system.

Ulnar Veins

Veins located along the ulnar side of the arm that help return deoxygenated blood from the hand and forearm to the heart.

Radial Vein

A vein that runs along the radial side of the forearm, draining blood from the hand and arm back toward the heart.

Brachiocephalic

A major artery in the upper chest that supplies blood to the right arm, neck, and head.