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Question(s) / Instruction(s):

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $39,375 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $3,285. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

A)

Account Receivable

39,375

 

Bad Debt Expense

3285

 

Sales

 

42660

       

B)

Bad Debt Expense

42660

 

Allowance for Doubtful Accounts

 

42660

       

C)

Bad Debt Expense

36090

 

Allowance for Doubtful Accounts

 

36090

       

D)

Bad Debt Expense

39375

 

Allowance for Doubtful Accounts

 

39375

       

E)

Account Receivable

36090

 

Allowance for Doubtful Accounts

 

36090

 

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