Calculate bad debt expense for the year

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Question - The following information relates to a company's accounts receivable: accounts receivable balance at the beginning of the year, $500,000; allowance for uncollectible accounts at the beginning of the year, $39,000 (credit balance); credit sales during the year, $1,950,000; accounts receivable written off during the year, $30,000; cash collections from customers, $2,100,000. Assuming the company estimates that future bad debts will equal 12% of the year-end balance in accounts receivable.

1. Calculate the year-end balance in the allowance for uncollectible accounts.

2. Calculate bad debt expense for the year.

Reference no: EM132033656

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