Question

On December 31, 2018, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $48,400 and $940, respectively. During 2019, Coolwear wrote off $820 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $1,140 at December 31, 2019. Bad debt expense for 2019 would be:a. $320b. $1,140c. $820d. $1,020

Answer 1

The answer is: D) $1,020

Step-by-step explanation:

The formula for calculating bad debt expenses 2019 for Coolwear Inc. is:

Bad debt expenses = allowance for uncollectible accounts 2019 - allowance for uncollectible accounts 2018 + amount written off as bad debt during 2019

Bad debt expenses 2019 = $1,140 - $940 + $820 = $1,020