Using the aging method, if uncollectible accounts are estimated at $700 and the allowance account balance is $490, what is the adjusting entry?

The adjusting entry in this scenario aims to align the allowance for uncollectible accounts with the estimated uncollectible accounts based on the aging method. The estimated uncollectible accounts are $700, which represents the desired ending balance for the allowance account. However, the current balance in the allowance account is only $490.

To adjust the allowance account to the correct amount, an additional amount must be added to it. This is calculated by taking the estimated uncollectible accounts of $700 and subtracting the existing balance of $490. This results in an additional $210 needed in the allowance account to reach the target of $700.

The appropriate journal entry would involve debiting the expense account for $210 (reflecting the increased expense related to bad debts) and crediting the allowance account for the same amount to adjust it to the correct ending balance. Thus, the correct procedure to perform this adjustment is not reflected as stated, but rather to debit the expense account for $210 and credit the allowance account for the same.

In this context, the correct adjustment procedure is based on moving the allowance account to the required level as dictated by the aging method, ensuring that financial statements accurately reflect potential losses from uncollectible accounts. Thus, the result