What is bad debt expense, Cost Accounting

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What is bad debt expense, using the aging method (also called the "percentage of receivables" method), given the following set of facts?

  A firm has $80 of gross accounts receivable.

  The firm estimates that for $20 of the receivables, 10% are expected to be uncollectible.

  The firm estimates that for the remaining $60 of the receivables, 50% are expected to be uncollectible.

  The opening balance in the allowance account was $45 and write-offs for the period were $20. Thus, the amount in the allowance account, after write-offs, but before bad debt expense was $25.


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