Question

Using the aging method of accounts receivable method, $5,700 of the company’s Accounts Receivable are estimated to be uncollectible. At the end of the year, the balance of Accounts Receivable is $107,000 and the unadjusted credit balance of the Allowance for Doubtful Accounts is $640. Credit sales during the year totaled $164,000. What is the current year’s Bad Debt Expense?

Answer 1

the current year bad debt expense is $5,060

Step-by-step explanation:

The computation of the current year bad debt expense is shown below:

Bad debt expense is

= Uncollectible Receivables - Allowance of doubtful debts

= $5,700 - $640

= $5,060

Hence, the current year bad debt expense is $5,060

We simply applied the above formula so that the correct value could come

And, the same is to be considered