Question

X Company uses determined that the net realizable value of its accounts receivable at December 31, 2018, based on an aging of the receivables, was $63,500. Additional information is as follows:

Allowance for doubtful account, 1/1/2018 $3,200 Uncollectible accounts written off during 2018 $650 Uncollectible accounts recovered during 2018 $300 Unadjusted accounts receivable at 12/31/2018 $67,200
For the year ended December 31, 2018, Ace's bad debt expense would be:_______.

Answer 1

$850

Step-by-step explanation:

Calculation to determine what Ace's bad debt expense would be:

First step is to calculate Ending Allowance for doubtful account

Ending Allowance for doubtful account=$67,200-$63,500

Ending Allowance for doubtful account=$3,700

Now let calculate what Ace's bad debt expense would be

Using this formula

Bad debt expense=[Ending Allowance for doubtful account-(Beginning Allowance for doubtful account-Uncollectible accounts written off+Uncollectible accounts recovered)]

Let plug in the formula

Bad debt expense=[$3,700-($3,200-$650+$300)]

Bad debt expense=$3,700-$2,850

Bad debt expense=$850

Therefore For the year ended December 31, 2018, Ace's bad debt expense would be:$850