Question

At the beginning of​ 2018, Uptown​ Travel, Inc. has the following account​ balances: Accounts receivable $ 46,000 ​(Debit) Allowance for Bad Debts $ 8,000 ​(Credit) During the​ year, credit sales were $ 820,000. Cash collected on credit sales was $ 750,000​, and $ 17,000 was written off. Uptown uses the aging-of-receivables method to record bad debts expense. The amount estimated as uncollectible was $ 29,000. The amount of Bad Debts Expense for 2018 is​ ________.

Answer 1

Answer:

The amount of bad debt expenses for the year 2018 is $38,000

Explanation:

In the given question we have been told that the allowance for bad debts is $8,000 which the uptown travel, Inc has made and also another information that has been given in the question is that the uptown travel Inc uses the aging of account receivable method , this a method where we are calculating the amount of uncollectible  bad debt expenses.

In this question it is been given that there is $17,000 of amount that is written off and there is $29,000 of amount which is uncollectible , so we will add these amount , which will give us the total amount which is uncollectible,

 = $29,000 + $ 17,000

 = $46,000

But in the question it has been given to us that the uptown travel Inc ahs made a allowance for the bad debts, so we will subtract this amount from the total amount which is uncollectible to get the amount of bad debt expenses.

Bad debt expenses = $46,000 - $8,000

                                 = $38,000