Question

uring the​ year, credit sales amounted to $ 840 comma 000. Cash collected on credit sales amounted to $ 790 comma 000​, and $ 18 comma 000 has been written off. At the end of the​ year, the company adjusted for bad debts expense using the percent minus of minus sales method and applied a​ rate, based on past​ history, of 2.5​%. The amount of bad debts expense for 2019 is

Answer 1

Answer:

$2,000 bad debt expense for the year 2019

Explanation:

As the bad debt expense is calcualted considering the sales the entire amoutn is considered bad debt expense rather and adjusting between that and the current allowance amount.

$800,000 sales x 2.5% rate = $2,000 bad debt expense