Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year before adjustment,and bad debt expense is estimated at 3% of net credit sales.If net credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivables is
A)$8,500
B)$9,500
C)$9,000
D)Cannot be determined

Question

Quizplus · Accepted Answer

The estimated bad debt expense is 3% of $300,000, which equals $9,000. The existing credit balance in the Allowance for Doubtful Accounts does not affect the calculation of the adjusting entry for bad debt expense.

Allowance for Doubtful Accounts Has a Credit Balance of $500