Question

Trinitron Inc. had a balance of $32,000 in the Allowance for Doubtful Accounts and a balance of $650,000 in Accounts Receivable on the 1/1/18balance sheet. During 2018, the company wrote off $16,700 of accounts and recovered $6,200 on accounts that had been previously written off. The balance in Accounts Receivable was $730,000 at 12/31/18at which time the company estimates that 6% of accounts receivable will prove to be uncollectible. Trinitron would report ____ as the 2018Bad Debt Expense.

Answer 1

$43,800

Step-by-step explanation:

Trinitron Inc. had

a balance of $32,000 in the Allowance for Doubtful Accounts and

a balance of $650,000 in Accounts Receivable on the 1/1/18

balance sheet. During 2018, the company wrote off $16,700 of accounts and recovered $6,200 on accounts that had been previously written off.

The balance in Accounts Receivable was $730,000 at 12/31/18 at which time the company estimates that 6% of accounts receivable will prove to be uncollectible.

Trinitron would report $43,800 as the 2018 Bad Debt Expense.

The percentage method of Bad debt expense determination simply applies the given percentage to the amount of accounts receivable or credit sales

In the case of Trinitron it is 6% x $730,000 = $43,800