multiple select question select all that apply management estimates that 1% of the $100,000 of credit sales…

multiple select question select all that apply management estimates that 1% of the $100,000 of credit sales will be uncollectible. the allowance for doubtful accounts has a $100 unadjusted debit balance. the adjusting entry to record estimated bad debts includes a _______. (select all that apply.) credit to allowance for doubtful accounts of $900 credit to allowance for doubtful accounts of $1,000 debit to bad debt expense of $900 credit to allowance for doubtful accounts of $1,100 debit to bad debt expense of $1,000 bad debt expense will show a negative (or credit) balance of $1,100

multiple select question select all that apply management estimates that 1% of the $100,000 of credit sales will be uncollectible. the allowance for doubtful accounts has a $100 unadjusted debit balance. the adjusting entry to record estimated bad debts includes a _______. (select all that apply.) credit to allowance for doubtful accounts of $900 credit to allowance for doubtful accounts of $1,000 debit to bad debt expense of $900 credit to allowance for doubtful accounts of $1,100 debit to bad debt expense of $1,000 bad debt expense will show a negative (or credit) balance of $1,100

Answer

Explanation:

Step1: Calculate estimated bad - debts

The estimated bad - debts are 1% of $100,000 of credit sales. So, the estimated bad - debts amount is $100,000\times0.01=$1,000$.

Step2: Determine the required credit to Allowance for Doubtful Accounts

The Allowance for Doubtful Accounts has a $100 unadjusted debit balance. To bring the allowance account to the estimated amount of $1,000 (a credit balance), we need to credit the account for $1,000 + 100=$1,100$.

Step3: Identify the bad - debt expense entry

The bad - debt expense is debited for the amount needed to adjust the allowance account. So, Bad Debt Expense is debited for $1,100$.

Answer:

  • credit to Allowance for Doubtful Accounts of $1,100
  • debit to Bad Debt Expense of $1,100