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At the end of the year, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $2,000 (debit) before adjustment. The company estimates future uncollectible accounts to be $10,000. What is the adjustment Dahir would record for Allowance for Uncollectible Accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

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Answer:

Bad Debt Expenses for the year:

= Total estimated uncollectible + Debit balance in Allowance for Doubtful accounts

= $10,000 + $2,000

= $12,000

Therefore,

The adjusted journal entry is as follows:

Bad Debt Expense A/c      Dr.  $12,000

To Allowance for Doubtful Accounts A/c      $12,000

(Being the Journal entry passed to record the Allowance for doubtful accounts)

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