Question

Trowel Corp. has outstanding accounts receivable totaling $13,000,000 as of December 31 and sales on credit during the year of $48,000,000. There is also a credit balance of $24,000 in the allowance for doubtful accounts. If the company estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year

Answer 1

Answer:

$756,000

Explanation:

Allowance for Bad Debts opening        ($24,000)

Allowance for Bad Debts Closing         $780,000

(13,000,000)*6%

Allowance Bad  Debt Expense for the year  $756,000