Bad debts expense adjusting
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Manning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 5% of accounts receivable will be uncollectable. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?
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Solution Summary
The solution calculated the adjusting entry the Manning Company will allow for doubtful accounts for a credit balance of $2000 before adjustment.
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