Question

Benson Company estimates its uncollectible accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. Benson computes a total of $1,800 in estimated uncollectible accounts as of December 31, 2013. Its Accounts Receivable account has a balance of $56,400 and its Allowance for Doubtful Accounts has a credit balance of $300 before adjustment at December 31, 2013. How much bad debts expense will Benson report in 2013

Answer 1

$1,500

Step-by-step explanation:

With regards to the above, we would compute Benson's Company bad debt expense for 2013 as;

= Estimated uncollectible accounts as of 31, December 2013 - Credit balance in the allowance for doubtful account before adjustment at December 31, 2013.

= $1,800 - $300

= $1,500

Therefore, Benson Company would report $1,500 as bad debts expense in 2013.