At the End of the Current Year, the Trial Balance

question 51

Short Answer

At the end of the current year, the trial balance of Bianca's Exports 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 4 percent of accounts receivable. $\begin{array}{lr}\text { Accounts Receivable } & \$ 1,300,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 9,000 \mathrm{Cr} \\\text { Sales } & 14,000,000 \mathrm{Cr} \\\text { Sales Returns and Allowances } & 110,000 \mathrm{Dr}\end{array}$ 1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

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Definitions:

Draft

A system of compulsory recruitment for military service.

League Covenant

The founding document of the League of Nations, outlining its principles and structure for maintaining world peace post-World War I.

Collective Security

An international agreement for mutual defense, where participating countries pledge mutual aid and protection in case any member is attacked.

World Court

Informally known as the International Court of Justice, it's the principal judicial organ of the United Nations, tasked with settling legal disputes between states.