Teller Inc.reported an allowance for doubtful accounts of $30,000 (credit)at December 31,2013,before performing an aging of accounts receivable.As a result of the aging,Teller Inc.determined that an estimated $52,000 of the December 31,2013,accounts receivable would prove uncollectible.The adjusting entry required at December 31,2013,would be
A) Doubtful Accounts Expense ...........22,000
Allowance for Doubtful Accounts ...22,000
B) Allowance for Doubtful Accounts .....22,000
Accounts Receivable ...............22,000
C) Doubtful Accounts Expense ...........52,000
Allowance for Doubtful Accounts ...52,000
D) Allowance for Doubtful Accounts .....52,000
Doubtful Accounts Expense .........52,000

Question

Quizplus · Accepted Answer

The correct adjusting entry to record the additional required allowance for doubtful accounts is to debit Doubtful Accounts Expense and credit Allowance for Doubtful Accounts for the difference between the new estimated uncollectible amount ($52,000) and the existing allowance ($30,000), which is $22,000. This increases the allowance to the newly estimated amount while recognizing the expense associated with the increase in expected uncollectible accounts.