Question

Cachet Co. has the following information:

Adjusted balance in Allowance for Doubtful Accounts $3000
Bad debts estimated for the current year $8000
Unadjusted credit balance in Allowance for Doubtful Accounts $4000
No recoveries were recorded during the year. What was the amount of accounts written o during the year?

Answer 1

The amount of accounts written off during the year for Cachet Co. is calculated as the sum of the unadjusted balance in the Allowance for Doubtful Accounts and estimated bad debts, minus the adjusted balance, which equals $9000.

Step-by-step explanation:

The student is asking about calculating the amount of accounts that have been written off during the year for a company, given certain parameters regarding the Allowance for Doubtful Accounts. To determine the accounts written off, we use the adjusted and unadjusted balances of the Allowance for Doubtful Accounts and the estimated bad debts for the year.

Performing the Calculation

Here's the formula to find the accounts written off:

Accounts Written Off = Unadjusted Balance + Bad Debts Expense - Adjusted Balance

So, using the provided figures:

Accounts Written Off = $4000 + $8000 - $3000

Accounts Written Off = $9000

Explanation

Your question implies that no recoveries were recorded during the year, which simplifies the calculation as we do not need to factor in any recoveries into the Allowance for Doubtful Accounts.