Question

On December 31, 2018, Ava Company had an ending balance of $8,063 in its accounts receivable account and an unadjusted (current) balance in its allowance for doubtful accounts account of $188.Ava estimates uncollectible accounts expense to be 6% of receivables. .Based on this information, the amount of uncollectible accounts expense shown on the 2018 income statement is $___________

Answer 1

Answer:

$296

Explanation:

    Allowance for Bad Debts for current year=$8,063*6%=$484

  Less; Previous balance of Allowance for Bad debts   =    ($188)

    Allowance for the current year                                     =   $296                                

Answer 2

Answer:

bad debt expense included in the income statement = $483.78

Explanation:

Since Ava Company estimates its bad debt expense as 6% of accounts receivable, to determine the amount that it mus report in the income statement we just have to multiply total accounts receivable times 6% = $8,063 x 6% = $483.78