At the end of the year, Brinkley Incorporated’s balance of Allowance for Uncollectible Accounts is $3,500 (credit) before adjustment. The company estimates future uncollectible accounts to be 5% of credit sales for the year. Credit sales for the year total $130,000.What is the adjustment Brinkley would record for Allowance for Uncollectible Accounts using the percentage-of-credit-sales method?

The adjustment Brinkley records for Allowance for Uncollectible Accounts using the percentage-of-credit-sales method:

Debit Bad debts expense $6,500

Credit Allowance for Uncollectible Accounts $6,500

Explanation:

Brinkley Incorporated’ uses the percentage-of-credit-sales method - application a flat percentage to the total amount of net credit sales for the period to  estimate uncollectible.

Estimated uncollectible = 5% x $130,000 = $6,500

The company records an Allowance for Uncollectible Accounts for $6,500 while simultaneously reporting $6,500 in bad debts expense. The  adjustment entry:

Debit Bad debts expense $6,500

Credit Allowance for Uncollectible Accounts $6,500

The balance in the  Allowance for Uncollectible Accounts after adjustment is $6,500 + $3,500 = $10,000

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.