At the End of the Current Year, the Trial Balance

question 64

Short Answer

At the end of the current year, the trial balance of Diane's Dress Shop included the accounts and balances shown below. Credit sales were $9,200,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. $\begin{array}{lr}\text { Accounts Receivable } & \$ 1,300,000\mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 9,000 \mathrm{Dr}\end{array}$ 1. What is the estimated loss from uncollectible accounts for the current year?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

---

Definitions:

Generic Branding

A strategy where products are marketed without a brand name, making them often cheaper than branded alternatives.

Reseller Licensing

Authorization given to a business or individual to sell another company's products.

Mixed Branding

A marketing strategy where a company sells products under its own brand name and also under a retailer's brand name.

Co-Branding

A marketing partnership between two or more brands where their products or services are combined or associated with each other to leverage brand equity.