Question

using the aging of accounts receivable, Age Old, Inc. estimates that $90000 of its 4000000 of accounts receivable will be uncollectible. Prior to making its adjusting entry, the unadjusted allowance for doutfull accounts has a credit balance of 1000. After the adjustment, Bad Debt Expense on the income statement will be _____ the allowance for doubtful accounts on the balance sheet

Answer 1

$90,000

Step-by-step explanation:

Bad debts expense is affiliated to a firms' current asset accounts receivable. It is also regarded as the uncollectible or doubtful accounts expense. Bad debts expense arises due to inability of customers to pay for goods or services that was purchased on credit.

The allowance for doubtful accounts on the balance sheet will be $90,000