The data below is for Alta Corporation for 2016. Accounts receivable--December 31, 2016 $2,144,000 Customer accounts written off as uncollectible during 2016 32,000 Allowance for doubtful accounts--January 1, 2016 34,800 Estimated uncollectible accounts based on an aging analysis 42,400 If the aging approach is used to estimate bad debts, determine the bad debt expense for 2016.
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.
The data below is for Alta Corporation for 2016.
$2,144,000
Customer accounts written off as uncollectible during 2016
32,000
Allowance for doubtful accounts--January 1, 2016
34,800
Estimated uncollectible accounts based on an aging analysis
42,400
If the aging approach is used to estimate
Step by step
Solved in 3 steps
