Question

The following information is from the records of Mountainview Camera​ Shop: Accounts​ receivable, December​ 31, 2018 ​$80,000 (debit) Net credit sales for 2018 ​160,000 Accounts written off as uncollectible during 2018 ​16,000 Cash sales during 2018 ​42,000 The company uses the direct writeminusoff method for bad debts. What is the amount of bad debts​ expense?

Answer 1

The amount of bad debts​ expense is $16,000

Step-by-step explanation:

Bad debt : The Bad debt is that amount in which the chances of payment receive is very less. Thus, the bad debt amount is deducted in the balance sheet under debtors account and also it is shown in Profit and loss Account in debit side.

Under direct write minus off method for bad debts, the bad debt amount is recognized irrespective of whatever information is given.

Since in the question, the non-collectible amount is given which is $16,000.

So, the amount of bad debts​ expense is $16,000