exercise 9 - 15 (algo) percent of receivables method lo p3\n a. estimate the balance of the allowance for…

exercise 9 - 15 (algo) percent of receivables method lo p3\n a. estimate the balance of the allowance for doubtful accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.\n b. prepare the adjusting entry to record bad debts expense using the estimate from part a. assume the unadjusted balance in the allowance for doubtful accounts is a $12,500 credit.\n c. prepare the adjusting entry to record bad debts expense using the estimate from part a. assume the unadjusted balance in the allowance for doubtful accounts is a $1,500 debit.\n complete this question by entering your answers in the tabs below.\n req a req b and c\n estimate the balance of the allowance for doubtful accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.\n estimated balance of allowance for uncollectibles

exercise 9 - 15 (algo) percent of receivables method lo p3\n a. estimate the balance of the allowance for doubtful accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.\n b. prepare the adjusting entry to record bad debts expense using the estimate from part a. assume the unadjusted balance in the allowance for doubtful accounts is a $12,500 credit.\n c. prepare the adjusting entry to record bad debts expense using the estimate from part a. assume the unadjusted balance in the allowance for doubtful accounts is a $1,500 debit.\n complete this question by entering your answers in the tabs below.\n req a req b and c\n estimate the balance of the allowance for doubtful accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.\n estimated balance of allowance for uncollectibles

Answer

Explanation:

Step1: Calculate estimated allowance

Let the total accounts - receivable be $x$. The estimated balance of the Allowance for Doubtful Accounts is calculated as 5% of $x$, i.e., $0.05x$. But since the value of total accounts - receivable is not given in the problem, we'll assume the general formula for the calculation.

Step2: For part b

The adjusting entry to record bad - debts expense when the unadjusted balance in the Allowance for Doubtful Accounts is a $12,500 credit. Let the estimated balance of the allowance be $E = 0.05x$. The bad - debts expense ($BD$) is calculated as $BD=E - 12500$ (if $E>12500$), and the adjusting entry is: Debit: Bad Debts Expense ($E - 12500$) Credit: Allowance for Doubtful Accounts ($E - 12500$)

Step3: For part c

The adjusting entry to record bad - debts expense when the unadjusted balance in the Allowance for Doubtful Accounts is a $1,500 debit. Let the estimated balance of the allowance be $E = 0.05x$. The bad - debts expense ($BD$) is calculated as $BD=E+1500$, and the adjusting entry is: Debit: Bad Debts Expense ($E + 1500$) Credit: Allowance for Doubtful Accounts ($E + 1500$)

Answer:

a. Without the value of total accounts - receivable, the estimated balance of the Allowance for Doubtful Accounts is $0.05\times$ (total accounts receivable) b. Debit: Bad Debts Expense (Estimated balance of allowance - 12500) Credit: Allowance for Doubtful Accounts (Estimated balance of allowance - 12500) c. Debit: Bad Debts Expense (Estimated balance of allowance + 1500) Credit: Allowance for Doubtful Accounts (Estimated balance of allowance + 1500)