Question

At the beginning of the year, Kullerud Manufacturing had a credit balance in its allowance for doubtful accounts of $10,670, and at the end of the year it was a credit balance of $11,240. During the year, Kullerud made credit sales of $1,270,990, collected receivables in the amount of $1,240,830, and recorded bad debt expense of $42,550.
Required:

Compute the amount of receivables that Kullerud wrote off during the year.

Answer 1

Answer:

$41,980

Explanation:

Allowance for doubtful account records the yearly estimated charge of bad debt expense. It ahd credit nature because it is an contra account receivable account. A bad debt write off is also recorded in this account. Account recivable balance on balance sheet is reported after adjusting Allowance for doubtful account balance.

Allowance for doubtful account

Ending Balance = Beginning Balance + Bad debt Expense for the year - Receivable written off

$11,240 = $10,670 + $42,550 - Receivable written off

$11,240 = $53,220 - Receivable written off

Receivable written off = $53,220 - $11,240 = $41,980