As of December 31,Frappa Company Has a Balance of $5,000

question 129

Multiple Choice

As of December 31,Frappa Company has a balance of $5,000 in accounts receivable.Of this amount $500 is past due and the remainder is not yet due.Frappa has a credit balance of $45 in the allowance for doubtful accounts.Frappa Company estimates its bad debt losses using the aging of receivables method,with estimated bad debt loss rates equal to 1% of accounts not yet due and 10% of past due accounts.How would the required adjusting journal entry be recorded in the Allowance for Doubtful Accounts?

• A)$95 (credit).
• B)$55 (credit).
• C)$50 (credit).
• D)$45 (debit).

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Definitions:

Time Period

A specific duration or interval of time, often characterized by certain events, conditions, or phenomena.

Sedimentary Layer

A layer of sedimentary rock which has been deposited over time, often distinguishable from other layers by its composition and color.

Granite

A coarse-grained igneous rock composed mainly of quartz and feldspar.

Stromatolites

Layered structures formed by the growth of microbial mats, often found in fossil form and considered some of the oldest evidence of life on Earth.