At the end of the year, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $2,700 (debit) before adjustment. The company estimates future uncollectible accounts to be $13,500. What is the adjustment Dahir would record for Allowance for Uncollectible Accounts?

According to the inquiry, Allowance for Uncollectible Accounts has a charge balance. Further uncollectible records are assessed to be $13,500. In this manner, organization needs to offer further leeway of same sum.  

Presently, since the parity in Allowance for Uncollectible Accounts is charge balance, which obviously expresses that $2700 is extra terrible obligations for which no section has been done in Income Statement and is as of now charged from Accounts Receivable as verifiable awful obligation. In this manner, we have to charge $16200($2700 + $13500) from pay statement.  

Subsequently, the modification will be:

Bad Debts Expense                                        16200  

Allowance for Uncollectible Accounts  16200

Allowance for Uncollectible Accounts= 16200 Credit

Explanation:

As per the question, Allowance for Uncollectible Accounts has a debit balance. Further uncollectible accounts are estimated to be $13,500.

Thus, we need to charge $16200($2700 + $13500) from income satement.

Allowance for Uncollectible Accounts= 16200 Credit

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