Question

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $43,000. If the balance of the Allowance for Doubtful Accounts is $4,600 balance before adjustment, what is the amount of bad debt expense for that period?

Answer 1

Step-by-step explanation:

Given that

Estimated uncolllectible account balance = $43,000

Balance of the allowance for doubtful accounts = $4,600

So the amount of bad debt expense is

Since it is not mentioned whether it is a credit or debit balance so we calculated by considering the both

If we considered the debit balance of allowance for doubtful debts so,

= $43,000 + $4,600

= $47,600

And, if credit balance, so

= $43,000 - $4,600

= $38,400