[ab29]

Becker Question –

I got the answer by setting up a T account for the Allowance for Doubtful account, without considering the provision. I’m just wondering if it is correct to solve for it this way. The correct answer is D.

For the year ended December 31, 1989, Beal Co. estimated its allowance for uncollectible accounts using the year-end aging of accounts receivable. The following data are available:

Allowance for uncollectible accounts, 1/1/89 $42,000

Provision for uncollectible accounts during 1989 (2% on credit sales of $2,000,000) 40,000

Uncollectible accounts written off, 11/30/89, 46,000
Estimated uncollectible accounts per aging, 12/31/89 , 52,000

After year-end adjustment, the uncollectible accounts expense for 1989 should be:
a. $46,000
b. $48,000
c. $52,000
d. $56,000