Question

Flint Company’s unadjusted trial balance at December 31, 2020, included the following accounts. Debit Credit Accounts receivable $53,600 Allowance for doubtful accounts 5,450 Net sales $1,209,200 Flint Company estimates its bad debt expense to be 6% of gross accounts receivable. Determine its bad debt expense for 2020. Bad debt expense for 2020 $___________.

Answer 1

Bad debt expense for 2020 is - $ 2,234

Step-by-step explanation:

Adjustment to the Allowance for Doubtful Debts (Increase or Decrease) are recorded in the Income Statement as part of Bad Debts Expenses as follows;

Increase in Allowance for Doubtful debts = Increases the Bad Debts Expense

Decrease in Allowance for Doubtful debts = Decreases the Bad Debts Expense

During the Period Allowances for Doubtful Debts are calculated as :

Allowances for Doubtful Debts = $53,600 × 6%

= $ 3,216

Bad Debt Expense = $ 3,216-$5,450

= - $ 2,234