If after taking a percentage of sales on account, it is estimated that $1,000 will not be collected and the allowance account has an existing credit balance of $200, the adjusting entry would be for the amount of $1,200.

Question

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The adjusting entry should be for $800, which is the difference needed to bring the allowance account to the estimated uncollectible amount of $1,000.

If After Taking a Percentage of Sales on Account, It