Problem
ABC Company is preparing their year-end financial statements. On December 31, 2021, the balance in Accounts Receivable was $680,000. An aging analysis of the accounts receivable indicated that $16,500 of the accounts receivable is expected to be uncollectible.Prepare the adjusting journal entry to record estimated uncollectible accounts receivable under each of the following independent assumptions:
A. Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment
B. Allowance for Doubtful Accounts has a debit balance of $730 before adjustment.
C. Determine the carrying amount of accounts receivable on December 31, 2021 (after adjustment) under each assumption.