Question

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $48000. If the balance of the Allowance for Doubtful Accounts is a $5600 credit before adjustment, what is the amount of bad debt expense for that period?

Answer 1

Answer: $42,400

Explanation:

The Bad debt expense for the year will be the Estimated uncollectible amount less the credit balance of the Allowance for doubtful accounts.

= Estimated uncollectible accounts - Credit balance on Allowance for doubtful accounts

= 48,000 - 5,600

= $42,400