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20 December, 08:57

Marigold Corp.'s account balances at December 31, 2020 for Accounts Receivable and the related Allowance for Doubtful Accounts are $917000 debit and $1920 credit, respectively. From an aging of accounts receivable, it is estimated that $42000 of the December 31 receivables will be uncollectible. The necessary adjusting entry would include a credit to the allowance account for

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  1. 20 December, 11:56
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    The necessary adjusting entry would include a credit to the allowance account for $40080

    Explanation:

    Marigold Corp.'s Account Balances

    At December 31, 2020

    Accounts Receivable $917000 Debit

    Allowance for Doubtful Accounts $1920 credit

    Bad Debts $42000

    Unadjusted Balance of Uncollectibles $ 1920

    Estimated Balances $ 42000

    Required Adjustment $ 40080

    The data tells that the Allowance for Doubtful Accounts has a credit balance of $1920 the required adjustment to the allowance for doubtful accounts is $ 40080. The required entry is

    Bad debts Expense 40,080 Dr.

    Allowance for Doubtful Accounts $40,080 credit
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