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Question
Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of credit sales. If credit sales are $800,000, the amount of the adjusting entry for the estimate of the uncollectible accounts
a. is $29,500
b. is $34,500
c. is $32,000
d. cannot be determined with the information given
Answer
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