The Walking Dead Co. provides services on-account and in exchange for cash. All general ledger accounts are adjusted monthly. For September, the following information is available: Accounts Receivable on September 1st is $22,400 (debit) Allowance for Doubtful Accounts on September 1st is $4,400 (credit) Services provided during September for cash $20,000 Services provided during September on-account $45,000 During the month collections on account were $34,400 and accounts written off as uncollectible were $2,000. The Walking Dead estimates bad debts at 8% of accounts receivable. After adjusting journal entries are recorded, what is the September 30th balance in Allowance for Doubtful Accounts

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ayokenny2001 ayokenny2001 · Answer 1 · 2021-05-12T03:01:38+02:00

Answer:

See below

Explanation:

Given that,

Accounts receivables :

Beginning balance 1 September = $22,400

Services on account = $45,000

Cash collected = $34,400

Written off accounts = $2,000

Allowance for doubtful accounts:

Beginning balance 1 September = $4,400

Adjusted balance for Allowance for doubtful accounts on 30th September

= Beginning balance 1 September - Written off accounts + Bad debt expense

= $4,400 + $2,000 + ($45,000 × 8%)

= $4,400 + $2,000 + $3,600

= $6,000