Question

Assume Zap industries reported the following adjusted account balances at year-end. 2019 2018 Accounts Receivable $ 1,730,200 $ 1,380,920 Allowance for Doubtful Accounts (96,000 ) (79,900 ) Accounts Receivable, Net $ 1,634,200 $ 1,301,020 Assume the company recorded no write-offs or recoveries during 2019. What was the amount of Bad Debt Expense reported in 2019?

Answer 1

The amount of Bad Debt Expenses which is reported for the year 2019 is an amount of $16,100.

Step-by-step explanation:

The amount of Bad Debt Expenses reported in 2019 can be calculated by taking the difference between the allowance for doubtful accounts in 2019 and 2018. Bad debt is the amount that the company may or may not be able to receive back from the debtors. The formula is:

Bad Debt Expense = Allowance for Doubtful Accounts (2019) - Allowance for Doubtful Accounts (2018)

Plugging in the values given in the question:

Bad Debt Expense = $96,000 - $79,900 = $16,100

Therefore, the amount of Bad Debt Expense reported in 2019 was $16,100.

Answer 2

The amount of Bad Debt Expense reported in 2019 was $16,100.

Step-by-step explanation:

Our concern is mainly on the allowance for doubtful accounts. Based on the facts given in the question, the opening balance of the allowance account was $79,900 credit balance, while the closing balance was $96,000 credit. Since there were no write-offs or recoveries during 2019, the bad debt expense is simply the difference between the closing balance and the opening balance i.e, $96,000 - $79,900 = $16,100.

The journal entries will be:

Debit Bad debt expense $16,100

Credit Allowance for doubtful account $16,100

(To record the bad debt expense for 2019)