A Company Ages Its Accounts Receivables to Determine Its End

question 108

Multiple Choice

A company ages its accounts receivables to determine its end of period adjustment for bad debts.At the end of the current year,management estimated that $39,375 of the accounts receivable balance would be uncollectible.Prior to any year-end adjustments,the Allowance for Doubtful Accounts had a credit balance of $3,285.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

• A) \[\begin{array} { | l | c | c | }
• \hline \text { Bad Debt Expense } & 36,090 & \\
• \hline \text { Allowance for Doubtful Accounts } & & \mathbf { 3 6 , 0 9 0 } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | c | c | }
• \hline \text { Bad Debt Expense } & 42,660 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 42,660 \\
• \hline
• \end{array}\]
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debt Expense } & 39,375 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 39,375 \\
• \hline
• \end{array}\)
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 39,375 & \\
• \hline \text { Bad Debt Expense } & 3,285 & \\
• \hline \text { Sales } & & 42,660 \\
• \hline
• \end{array}\]
• E) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable } & 36,090 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 36,090 \\
• \hline
• \end{array}\)