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Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 2% of sales. If sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is:______.a. $12,500.b. $11,500.c. $12,000.d. None of these answers are correct.

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Answer:

$12,000

Explanation:

Calculation to determine what the amount of the adjusting entry to record the provision for doubtful accounts is

Using this formula

Provision for doubtful accounts =Sales *Uncollectible accounts expense estimated percentage of sales

Let plug in the formula

Provision for doubtful accounts = 2% × $600,000

Provision for doubtful accounts=$12,000

Therefore the amount of the adjusting entry to record the provision for doubtful accounts is $12,000

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