A company has an unadjusted debit balance in the Allowance for Doubtful Accounts of $10,000 and the following aging schedule: Name of Customer A с D Total Percent Uncollectible Total $55,000 112,000 106,000 43,000 $316,000.00 Under 30 days $30,000 90,000 65,000 35,000 $220,000.00 1% 30-60 days $20,000 10,000 22,000 2,000 $54,000.00 30% What amount should be recorded as the Bad Debt Expense? 60-90 days Over 90 days $5,000 5,000 7,000 15,000 4,000 5,000 1,000 $25,000.00 $17,000.00 25% 35%
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.
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