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LekaFEV [45]
3 years ago
7

The annual report for Fallon Holding Corporation contained the following information: (in millions) 2016 2015 Accounts Receivabl

e $ 671 $ 733 Allowance for Doubtful Accounts 31 32 Accounts Receivable, Net $ 640 $ 701 Assume that accounts receivable write-offs amounted to $12 during 2016 and $2 during 2015, and that Fallon did not record any recoveries. Required: Determine the Bad Debt Expense for 2016 based on the above facts. (Enter your answer in millions.)
Business
1 answer:
ollegr [7]3 years ago
4 0

Answer:

bad debt expense for the year 2016: 11

Explanation:

We can solve for bad debt expense doing the following

beginning allowance

- write-off accounts

+ bad debt expense

Equals to ending allowance

<u>We plug our values: </u>

2016 Beginning  allowance      32

(Ending 2015)

write-off                                     (12)

bad debt expense                  <u>    ?   </u>

2016 Ending  allowance            31

And solve for bad debt expense:

Bad debt expense = 12 + 31 - 32 = 11

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