Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? a. Bad Debt Expense $17,000\quad 17,000$
Allowance for Doubtful Accounts $17,000\quad 17,000$
b. Bad Debt Expense $19,500\quad 19,500$
Allowance for Doubtful Accounts $19,500\quad 19,500$
c. Bad Debt Expense 22,000
Allowance for Doubtful Accounts $22,000\quad 22,000$
d. Bad Debt Expense 65,000
Allowance for Doubtful Accounts $65,000\quad 65,000$

Question

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? a. Bad Debt Expense

17,000\quad 17,000

Allowance for Doubtful Accounts

17,000\quad 17,000

b. Bad Debt Expense

19,500\quad 19,500

Allowance for Doubtful Accounts

19,500\quad 19,500

c. Bad Debt Expense

22,000
Allowance for Doubtful Accounts

22,000\quad 22,000

d. Bad Debt Expense

65,000
Allowance for Doubtful Accounts

65,000\quad 65,000

Dorian J. Hairston · Accepted Answer

Final Answer : A

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