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Net credit sales for the month are $970000. The accounts receivable balance is $190000. The allowance is calculated as 10% of the receivables balance using the percentage-of-receivables basis. If the Allowance for Doubtful Accounts has a credit balance of $9600 before adjustment, what is the balance after adjustment? $19000 $28600 $19960 $9400

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jepessoa

Answer:

$19,000

Explanation:

To calculate the balance for Allowance for Doubtful Accounts you must multiply the total accounts receivable balance by the percentage of estimated bad credit = $190,000 x 10% = $19,000

The Allowance for Doubtful Accounts is a contra asset account so it should have credit balance or be equal to 0.

  • Cr 19,000

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