On June 30th (The End of the Period) Brown Company

question 24

Essay

On June 30th (the end of the period) Brown Company has a credit balance of $2,275 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $30,025. Journalize the appropriate adjusting entry.

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Definitions:

Ending Inventory

The cumulative worth of products on offer for sale when an accounting cycle ends.

Gross Margin

The gap between the income from sales and the expense of goods sold, represented as a proportion of sales income.

Net Sales

The revenue from sales of goods or services after deducting returns, allowances, and discounts.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing what is sacrificed as a result of choosing one option over another.