Question

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $33600. If the balance of the Allowance for Doubtful Accounts is $7640 debit before adjustment, what is the amount of bad debt expense for that period

Answer 1

The amount of bad debt expense for that period is $41240.

Step-by-step explanation:

As the Allowance for Doubtful Accounts has credit balance because it is a contra account receivable account. This account should have credit balance. As already account has debit balance so this balance needs to be added in the estimated uncollectible accounts for the period to calculate the bad debt expense for the period.

Estimated uncollectible accounts = $33600

Allowance for Doubtful Accounts Balance = $7640 debit

Bad debt expense = $33600 + $7640 = $41240