Question

Using the allowance method, the uncollectible accounts for the year is estimated to be $28,000. If the balance for the Allowance for Doubtful Accounts is a $7,000 debit before adjustment, what is the amount of bad debt expense for the period?a. $7,000b. $21,000c. $28,000d. $35,000

Answer 1

d. $35,000

Step-by-step explanation:

The computation of the bad debt expense for the period is shown below:

= Estimated uncollectible amount + balance of allowance for doubtful debts

= $28,000 + $7,000

= $35,000

To find out the bad debt expense we added the estimated uncollected amount and the balance of allowance for doubtful debts as it has a debit balance. And, for true amount, we added both items which are shown above.