Determine the amount of bad debts expense

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A large corporation recently reported the following amounts on its year-end balance sheets:

2007 2008

Accounts receivable $8,400,000 $8,800,000

Allowance for doubtful accounts 96,000 106,000

A footnote to these statements indicated that the company uses a percentage of its credit sales to determine its bad debts expense, that $60,000 of uncollectible accounts had been written off during 2007 and $85,000 of uncollectible accounts had been written off in 2008, and that there had not been any recoveries of accounts written off.

Required:

Determine the amount of bad debts expense that must have been recorded by the company for 2008.

Reference no: EM13151604

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