Response to the following :
Assume the same facts as in problem, except that Wecker estimates uncollectible as 1.0% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles.
Problem:
Wecker Company's year-end unadjusted trial balance shows accounts receivable of $89,000, allowance for doubtful accounts of $500 (credit), and sales of $270,000. Uncollectibles are estimated to be 1.5% of accounts receivable.
1. Prepare the December 31 year-end adjusting entry for uncollectibles.
2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $200?