Question

Trainor Company estimates bad debt expense using a percentage of credit sales (5%). The company began its current year with an $8,500 balance in the allowance account. During the current year, $10,500 of accounts receivable were written off, and $1,200 of previously written off accounts were collected. Credit sales for the year were $255,000. The bad debt expense for the year wasa) $12,750b) $11,550c) $10,500d) $8,500

Answer 1

Answer:

a) $12,750

Explanation:

The computation of the bad debt expense is shown below:

= Credit sales × estimated percentage given

= $255,000 × 5%

= $12,500

Simply we multiplied the credit sales with the given estimated percentage so that the accurate amount can come i.e bad debt expense for the particular year

All other information which is given is not relevant. Hence, ignored it