Question

At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $360,000 and in Allowance for Uncollectible Accounts of $1,050 (debit) before any adjustments. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for the year should be:

Answer 1

The answer is given below;

Step-by-step explanation:

Allowance for doubtful accounts =$360,000*3%=$10,800

Allowance for uncollectible before adjustment $1,050

Total Bad Debt Expense for the year $11,850