Question

Case Co.’s balances in Allowance for Doubtful Accounts were $25,000 at the beginning of the current year and $18,000 at year end. During the year, receivables of $10,000 were written off as uncollectible. What amount should Case report as bad debt expense at year end?

Answer 1

The bad debt expense for the year is 3,000 dollars

Step-by-step explanation:

We should solve for the bad debt expense with a reverse engineer on the allowance T account

Allowance

DEBIT CREDIT

Beginning 25,000

write-off 10,000

bad debt X

Ending 18,000

25,000 - 10,000 + X = 18,000

15,000 + X = 18,000

X = 18,000 - 15,000

X = 3,000