During the year, Bears Inc. recorded credit sales of $500,000. Before adjustments at year-end, Bears has accounts receivable of $300,000, of which $50,000 is past due, and the allowance account had a credit balance of $2,500. Using the aging of receivables method, what would be the adjustment assuming Bears expects it will not collect 5% of the amount not yet past due and 20% of the amount past due?

During the year, Bears Inc. recorded credit sales of $500,000. Before adjustments at year-end, Bears has accounts receivable of $300,000, of which $50,000 is past due, and the allowance account had a credit balance of $2,500. Using the aging of receivables method, what would be the adjustment assuming Bears expects it will not collect 5% of the amount not yet past due and 20% of the amount past due?



A. Debit -Bad Debt Expense 22,500

Credit - Allowance for Uncollectible Accounts 22,500


B. Debit - Bad Debt Expense 25,000

Credit - Allowance for Uncollectible Accounts 25,000


C. Debit - Bad Debt Expense 20,000

Credit - Allowance for Uncollectible Accounts 20,000


D. Debit - Allowance for Uncollectible Accounts 20,000

Credit - Bad Debt Expense 20,000



Answer: Debit - Bad Debt Expense 20,000

Credit - Allowance for Uncollectible Accounts 20,000


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