Refer to the data in BE8-5 for Gourdeau Co.
In BE8-5

(a) Assuming the allowance for doubtful accounts has an unadjusted credit balance of $4,500 at December 31, what is the bad debt expense for the year?
(b) Assume instead that the allowance for doubtful accounts had a debit balance of $2,500. What is the bad debt expense for the year?

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Number of Days Estimated Uncollectible Accounts Accounts Receivable $265,000 70,000 45,000 20,000 $400,000 Estimated % Uncollectible 196 4% 10% 20% Outstanding 0-30 days 31-60 days 61-90 days Over 90 days Total