MC Qu. 73 In the balance sheet at the end of its... In the balance sheet at the

Question

MC Qu. 73 In the balance sheet at the end of its... In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible year were $2,210,000, and cash collections from credit customers totaled $1880,000. What bad debt expense would Dinty report in its first year income statement? accounts of g the year, Dinty wrote off $31,000 of accounts receivable it had attempted to collect and failed Credit sales for the Multiple Choice $82,800 $51,800. $113,800 Can't be determined from the given information

Explanation / Answer

Ending allowance for uncollectible accounts = Beginning allowance for uncollectibe accounts + Bad debt expense - Accounts receivable written off

Being first year of operations, beginning allowance for uncollectible accounts = $0

Hence,

$82,800 = $0 + Bad debt expense - $31,000

Bad debt expense = $82,800 + $31,000 = $113,800

Hence, correct answer is $113,800

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