A Company Ages Its Accounts Receivables to Determine Its End

question 124

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

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Definitions:

Temperature

A measure of the internal energy contained in a substance, indicative of its thermal state.

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Reproductive cells (sperm in males and eggs in females) that unite during fertilization to form a new organism.

Ovaries

Female reproductive organs in which eggs are produced along with the secretion of hormones like estrogen and progesterone.

Cervix

The lower, narrow end of the uterus, which opens into the vagina and dilates during childbirth to allow passage of the baby.