40. London Fashion began operations on January 1\", 2008. The following selected

Question

40. London Fashion began operations on January 1", 2008. The following selected in the company's December 31, 2008 & 2009 comparative Balance Sheet and Incoe information came from 2008 2002 Accounts Receivable, net of an allowance for doubtful accounts of $10,530 at 12/31/2008&$12,987 at 12/31/2009. S139 470 $172,013 Sales Revenue $500,000 $625,000 ad Debt Expense $15,530 S10,457 All of London's sales are made on credit and they base their bad debt estimate on an extensive of the accounts receivable aging schedule. Given this information what was the dollar amount of debts written off in 2008? analysis bad A. $10,530 B. $21,060 C. $5,000 D. $15,530 E. None of the above

Explanation / Answer

Answer: Option C. $5,000

Allowance for Doubtful Accounts 0 1/1/2008 Bal. Bad debt write off 5000 15530 Bad debt expense (15530 - 10530) 10530 12/31/2008 Bal.

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