The following information relates to a company's accounts receivable: gross balance of accounts receivable at the beginning of the year, $500,000; provision for uncollectible accounts at the beginning of the year, $39,000 (credit balance); credit sales during the year, $1,950,000; accounts receivable paid off during the year, $30,000; cash receipts from customers, $2,100,000. Assuming that the company estimates that future bad debts will be equal to 12% of the year-end balance in accounts receivable.


1. Calculate the bad debt expense for the year.
2. Calculate the year-end balance in the allowance for bad debts.

Answer rating: 100% (QA)

To calculate the bad debt expense for the year we need to determine the ending balance of the allowance for uncollectible accounts We can use the foll... View the full answer