Question

Both accounts have normal balances. The company uses the aging of accounts receivable method. Its estimate of uncollectible receivables resulting from the aging analysis equals $8,350. What is the amount of Bad Debt Expense to be recorded for the year?

Answer 1

$8,350

Step-by-step explanation:

When an organization estimates its uncollectible receivables, the entries posted are credit to the doubtful debts accounts (a balance sheet account usually mapped to accounts receivable) and a debit to Bad Debt Expense.

As such, given that both accounts have normal balances and the company uses the aging of accounts receivable method, the result of the aging analysis used to estimate uncollectible receivables is the basis of what will be posted to the bad debt expense.

Hence bad debt expense for the year = $8,350