Ask Question
6 April, 02:58

At the end of the year, Mercy Cosmetics' balance of Allowance for Uncollectible Accounts is $730 (debit) before adjustment. The balance of Accounts Receivable is $26,300. The company estimates that 13% of accounts will not be collected over the next year. What is the adjustment Mercy Cosmetics would record for Allowance for Uncollectible Accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.);

+5
Answers (2)
  1. 6 April, 03:31
    0
    A credit of $4,149 adjustment is required in allowance for uncollectible accounts

    Explanation:

    The amount that should be posted to allowance for uncollectible accounts in the year is computed thus:

    $26,300*13% = $3,419.00 credit entry

    The allowance for uncollectible account would look like this:

    Dr Balance brought forward $730

    Dr Increase in the year $3,419

    Adjustment required (balancing figure) $4,149

    The adjustment Mercy Cosmetics would record for Allowance for uncollectible accounts is the balancing figure of $4,149 as shown above.

    Find below alternative approach:

    1) take 13% of accounts receivable of $26,300 = ($26,300*13%) = $3419

    2) Add the balance for the allowance of uncollectible accounts debit ($3419+$730) = $4149

    3) debit bad dept expense for $4,149

    4) credit allowance for uncollectible accounts $4,149
  2. 6 April, 04:04
    0
    Dr Bad debt expenses $4,149

    Cr Allowance for uncollectible accounts $4,149

    Explanation:

    Dr Bad debt expenses $4,149

    Cr Allowance for uncollectible accounts $4,149

    13%*$26,300 = $3,419

    $3,419 + $730=$4,149
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “At the end of the year, Mercy Cosmetics' balance of Allowance for Uncollectible Accounts is $730 (debit) before adjustment. The balance of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers