At year end, the company’s aged list of Accounts receivable showed the following breakdown. The adjusted balance for the allowance of doubtful accounts, at year end is a $5,600 debit. Days outstanding Outstanding Balances Estimated % Uncollectible 0 – 30 days $234,000 5% 31 – 90 days 54,300 10% Over 90 days 21,300 20% Instructions: Calculate the bad debt expense for the year. Enter your answer into the following box (nearest dollar amount without dollar sign or comma, e.g. 15000).
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
At year end, the company’s aged list of
The adjusted balance for the allowance of doubtful accounts, at year end is a $5,600 debit.
|
Days outstanding |
Outstanding Balances |
Estimated % Uncollectible |
|
0 – 30 days |
$234,000 |
5% |
|
31 – 90 days |
54,300 |
10% |
|
Over 90 days |
21,300 |
20% |
Instructions: Calculate the
Enter your answer into the following box (nearest dollar amount without dollar sign or comma, e.g. 15000).
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