Question

Vasguez Corporation had a 1/1/17 balance in the Allowance for Doubtful Accounts of $40,000. During 2017, it wrote off $28,800 of accounts and collected $8,400 on accounts previously written off. The balance in Accounts Receivable was $800,000 at 1/1 and $960,000 at 12/31. At 12/31/17, Vasguez estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2017?

Answer 1

bad debt expense for the year ended 2017 will be 28,400 dollars

Step-by-step explanation:

The year-end accounts receivables shold be considering the ending accounts receivables:

Accounts receivable at year-end: 960,000

expected uncollectible 5% of 960,000: 48,000

beginning allowance: 40,000

wrote-off (28,800)

recovery accounts 8,400

unadjusted balance: 19,600

ending balance: 48,000

adjusment: 28,400

bad debt expense for the year ended 2017 will be 28,400 dollars