Question

Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2013, net credit sales totaled $4,900,000, and the estimated bad debt percentage is 1.90%. The allowance for uncollectible accounts had a credit balance of $46,000 at the beginning of 2013 and $42,000, after adjusting entries, at the end of 2013.
If the company uses the direct write-off method, what would bad debt expense be for 2013?

Answer 1

Answer:

$97,100

Explanation:

Calculation for If the company uses the direct write-off method, what would bad debt expense be for 2013

Beginning Balance $46,000

Add Bad debt expense for 2013

(1.90% x $4,900,000) $93,100

Less Ending balance ($42,000)

Bad debt Expense $97,100

Therefore If the company uses the direct write-off method, what would bad debt expense be for 2013 is $97,100