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d.
when an account is determined to be uncollectible
9. 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 uncollectible. What adjusting entry
will Manning Company make if the Allowance for Doubtful Accounts has
a credit balance of $2,000 before adjustment?
a.
Bad Debts Expense
10,000
Allowance for Doubtful Accounts
10,000
b.
Bad Debts Expense
8,000
Allowance for Doubtful Accounts
8,000
c.
Bad Debts Expense
Accounts Receivable
8,000
8,000