Question

Blue Spruce Corp. unadjusted trial balance includes the following balances (assume normal balances):•Accounts Receivable$1160000•Allowances for Doubtful Accounts$24900Bad debts are estimated to be 5% of outstanding receivables. What amount of bad debt expense will the company record?

Answer 1

Answer: = $33100

Explanation:

Amount of bad debt expense is given by;

= Bad debt estimate - allowance for doubtful accounts

= 5% of account receivables - allowance for doubtful accounts

= 5/100 × 1160000 - 24900

=58000 - 24900

= $33100

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