On the first day of Year Two, the Richmond Corporation holds accounts receivable of$400,000 and an allowance for doubtful accounts of $23,000 for a net realizable value of$377,000. During the year, credit sales were $450,000 and cash collections amounted to$380,000. In addition, $25,000 in receivables were written off as uncollectible. If 4 percent ofending accounts receivable is estimated as uncollectible, what bad debt expense is reportedfor Year Two on Richmond's income statement?

Answer rating: 100% (QA)

To calculate the bad debt expense for Year Two we first need to determine the amount of uncollectibl... View the full answer