Question

Dude Ranch Circle estimates its uncollectible accounts at 1.5% of its credit sales of$825,000, when adjusting for estimated losses from uncollectible accounts, the debit to Bad Debt Expense is?

Answer 1

The Bad Debt Expense is calculated as 1.5% of the credit sales, which amounts to $12,375 when applying the percentage to $825,000 in credit sales.

Step-by-step explanation:

The student's question relates to calculating the bad debt expense for Dude Ranch Circle based on a percentage of credit sales. To find the debit to Bad Debt Expense, we apply the given percentage to the credit sales amount. In this case, we calculate 1.5% of $825,000.

The calculation is as follows:

Bad Debt Expense = 1.5% of $825,000

Bad Debt Expense = 0.015 × $825,000

Bad Debt Expense = $12,375

Therefore, the debit to Bad Debt Expense due to estimated losses from uncollectible accounts would be $12,375.