Answer Happy

A Company was preparing its year end financials and preparing adjusting entries. • Estimated uncollectible if based on Receivables: 7% of Accounts Receivable The company chose to use the Balance Sheet approach to account for bad debt expense. Additional information was provided: . • Accounts Receivable at year end • Credit Sales during the year • Allowance for Doubtful Account Based on the data provided and the company's decision to use the Balance Sheet approach, which adjusting journal entry is correct? Bad Debt Expense Allowance for Doubtful Accounts Bad Debt Expense Allowance for Doubtful Accounts Bad Debt Expense Allowance for Doubtful Accounts Bad Debt Expense Allowance for Doubtful Accounts $ 890,000 $1,200,400 $ 12,500 [Debit Balance before adjustment] None of the above $62,300 $60,020 $87,300 $85,020 $62,300 $60,020 $87,300 $85,020