Exercise 9-7 Percent of accounts receivable method LO P3 Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $89,000, and it estimates that 4% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,513 credit balance before the adjustment. (b) a $445 debit balance before the adjustment.

a. Before adjusting, the Allowance for Doubtful Accounts has a $2,100 credit balance.

Debit Bad debts expense $1,605

Credit Allowance for Doubtful Accounts $1,605

b. Before adjusting, the Allowance for Doubtful Accounts has a $618 debit balance.

Debit Bad debts expense $4,323

Credit Allowance for Doubtful Accounts $4,323

Explanation:

Mazie Supply Co. uses the percent of accounts receivable method. It estimates that 3% will be uncollectible.

Estimated uncollectible =  3% x $123,500 = $3,705

a. Before adjusting, the Allowance for Doubtful Accounts has a $2,100 credit balance.

Bad debts expense = $3,705 - $2,100 = $1,605

The year-end adjusting entry:

Debit Bad debts expense $1,605

Credit Allowance for Doubtful Accounts $1,605

b. Before adjusting, the Allowance for Doubtful Accounts has a $618 debit balance

Bad debts expense = $3,705 + $618 = $4,323

The year-end adjusting entry:

Debit Bad debts expense $4,323

Credit Allowance for Doubtful Accounts $4,323

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Explanation:

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported

answer; i believe the answer is 40,600,000;