The following data are from the company's records for the year ended December 31: Accounts receivable--January 1 $ 350,000 Credit sales during the year 1,200,000 Collections from credit customers during the year 850,000 Customer accounts written off as uncollected during the year 10,000 Allowance for doubtful accounts--January 1 35,000 Estimated uncollected accounts based on an aging analysis 50,000 If the aging method is used to estimate bad debts, what amount should be recorded as bad debt expense?
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 following data are from the company's records for the year ended December 31:
| $ 350,000 | |
| Credit sales during the year | 1,200,000 |
| Collections from credit customers during the year | 850,000 |
| Customer accounts written off as uncollected during the year | 10,000 |
| Allowance for doubtful accounts--January 1 | 35,000 |
| Estimated uncollected accounts based on an aging analysis | 50,000 |
If the aging method is used to estimate
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