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(Solution document) A company has $109,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts.


A company has $109,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 3% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $990 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:


A. $2,280

B. $3,270

C. $4,260

D. $990

E. None of these is correct.

 







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