Kerry Company's accounts receivable are $180,000 at the end of the year. The allowance for doubtful accounts has a credit balance of $2,000 before any adjustments have been made. The Company estimates that 3% of accounts receivable will not be collected.

At the end of the year, the credit balance of the allowance for doubtful accounts after the adjustment is:

Answer 1
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What is the carrying amount of the accounts receivable at the end of the year to be reported on balance sheet after the adjusting entries?

Answer 2
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The adjustment for the bad debt expense for the year amounted to:

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anthougo anthougo · Answer 1 · 2022-02-02T11:41:49+01:00

1. At year-end, the credit balance of the allowance for doubtful accounts after adjustment is $5,400.

2. The carrying amount of the accounts receivable at the year-end after adjustments will be $174,600 ($180,000 - $5,400).

3. The adjustment for the bad debt expense for the year will amount too $3,400 ($5,400 - $2,000).

Accounts receivable balance at year-end = $180,000

Allowance for doubtful accounts = $2,000 (credit)

Estimated uncollectible = 3% of $5,400 ($180,000 x 3%)

Thus, the adjustment for the bad debt expense for the year will amount too $3,400.

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