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Alika [10]
4 years ago
7

Allowance for Doubtful Accounts, showed a credit balance of $950 on January 1, 2004. During the year, the company wrote off $3,2

00 of uncollectible accounts, and reinstated $1,300 of previously written off accounts. The Dec 31, 2004 balance of Accounts Receivable is $97,500, and 6% of outstanding accounts receivable are assumed to be uncollectible. What will be the company's Bad Debts Expense for 2004
Business
1 answer:
zloy xaker [14]4 years ago
8 0

Answer:

Bad debts expense = $6,800

Explanation:

Estimated bad debts =  $97,500 * 6%    

Estimated bad debts =  $5,850

                 Allowance for doubtful accounts  

Wrote off         $3,200      Opening  Balance  $950  

                                          Reinstated             $1,300

                                          Adjustment             $6,800

 

                                          Closing balance       $5,850

Bad debts expense = $6,800

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