Question

Suppose that the balance of a company's Allowance for Uncollectible Accounts was $6,200 (credit) at the end of 2015, prior to any adjustments. The company estimated that the total of uncollectible accounts in its accounts receivable was $44,300 at the end of 2015. What amount of bad debt expense would appear in the company's 2015 income statement?

Answer 1

bad debt expense 38,100

Step-by-step explanation:

We will adjust the allowance to match the estimated incollectible accounts, this adjustment will done against the bad debt expense account which, will be disclusure on the income statement.

allowance for uncollectble accounts 44,300

current balance (6,200)

adjustment for allowance 38,100

Then, the company will do the adjusting entry:

bad debt expense 38,100 debit

allowance for uncollectible account 38,100 credit

This will be the bad dent expense in the income statement.