Question

Mills Corporation's balance sheet included the following information: Accounts Receivable $ 560,000 Less: Allowance for Doubtful Accounts 71,000 Accounts Receivable, Net of Allowance $ 489,000 If the Allowance account had a credit balance of $30,500 immediately before the year-end adjustment for bad debts and no accounts were written-off or allowed for during the year, what was the amount of Bad Debt Expense recognized during the year?

Answer 1

Answer:

$40,500

Explanation:

The computation of the amount of  Bad Debt Expense recognized during the year is shown below:

Bad debt expense = Accounts Receivable - Net of Allowance - credit balance in allowance for doubtful accounts before adjustment

= $560,000 - $489,000 - $30,500

= $40,500

All other information i.e given in the question is not relevant. Hence, ignored it