Response to the following problem:
At the end of the current year, the accounts receivable account has a balance of $625,000 and net sales for the year total $5,200,000.
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
a. The allowance account before adjustment has a negative balance of 2$1,950. Bad debt expense is estimated at ¼ of 1% of net sales.
b. The allowance account before adjustment has a negative balance of 2$1,950. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $17,500.
c. The allowance account before adjustment has a positive balance of $2,200. Bad debt expense is estimated at ½ of 1% of net sales.
d. The allowance account before adjustment has a positive balance of $2,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $21,900