Question

On December 31, 2018, Ava Company had an ending balance of $8,063 in its accounts receivable account and an unadjusted (current) balance in its allowance for doubtful accounts account of $188.Ava estimates uncollectible accounts expense to be 6% of receivables. .Based on this information, the amount of uncollectible accounts expense shown on the 2018 income statement is $___________

Answer 1

bad debt expense included in the income statement = $483.78

Step-by-step explanation:

Since Ava Company estimates its bad debt expense as 6% of accounts receivable, to determine the amount that it mus report in the income statement we just have to multiply total accounts receivable times 6% = $8,063 x 6% = $483.78

Answer 2

$296

Step-by-step explanation:

Allowance for Bad Debts for current year=$8,063*6%=$484

Less; Previous balance of Allowance for Bad debts = ($188)

Allowance for the current year = $296