At the End of the Current Year, the Trial Balance

question 70

Short Answer

At the end of the current year, the trial balance of Tracey's Consulting Services included the accounts and balances shown below. Credit sales were $90,000. Returns and allowances on these sales were $1,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. $\begin{array}{lr}\text { Accounts Receivable } & \$ 18,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 500 \mathrm{Dr} \text {. } \\\text { Sales } & 145,000 \mathrm{Cr} \text {. } \\\text { Sales Returns and Allowances } & 2,000 \mathrm{Dr} \text {. }\end{array}$ 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?

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