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Determine the Amount to Be Added to Allowance for Doubtful $300 \$ 300

Question 168

Essay

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. (a) Credit balance of $300 \$ 300 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,500 \$ 8,500 .
(b) Credit balance of $500 \$ 500 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% 2 \% of credit sales, which totaled $1,000,000 \$ 1,000,000 for the year.

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