A company creates the following accounts receivable aging report at the end of the year:
Age Amount Estimated Uncollectible
Less than 30 days $ 6,000 5 %
31-60 days $ 4,000 10 %
61+ days $ 2,000 25 %
Prior to adjusting entries, the Allowance for Uncollectible Accounts has a debit balance of $500. The year-end adjustment would include a:
A) Credit to Allowance for Uncollectible Accounts for $1,200.
B) Debit to Bad Debt Expense for $700.
C) Debit to Bad Debt Expense for $1,700.
D) Debit to Bad Debt Expense for $1,200.
Answer: Debit to Bad Debt Expense for $1,700.
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