Question

On December 31, 2021, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $46,500 and $1,550, respectively. During 2022, Coolwear wrote off $550 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,700 at December 31, 2022. Bad debt expense for 2022 would be:

Answer 1

$4,700

Step-by-step explanation:

Calculation to determine what the Bad debt expense for 2022 would be:

Using this formula

2022 Bad debt Expense =Allowance for uncollectible accounts-(Balance in Allowance for Uncollectible Accounts -Accounts receivable written off)

Let plug in the formula

2022 Bad debt Expense$5,700-($1,550-$550)

2022 Bad debt Expense=$5,700-$1,000

2022 Bad debt Expense=$4,700

Therefore Bad debt expense for 2022 would be:$4,700