Question

May Co. prepared an aging of its accounts receivable at December 31, 2007 and determined that the net realizable value of the receivables was $300,000. Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/07—credit balance:


$ 34,000


Accounts written off as uncollectible during 2007:


23,000


Accounts receivable at 12/31/07:


325,000


Uncollectible accounts recovered during 2007:


5,000



For the year ended December 31, 2007, May's bad debt expense would be


$25,000.


$23,000.


$16,000.


$9,000.

Answer 1

Answer: $23,000

Explanation: May's bad debt expense for year 2007 is $23,000. this was the actual amount written off as uncollected for the year. Though a provision of $34,000 was made but this was just a provision. it was not the actual written off.