Johnson Company uses the allowance method to account for uncollectible accounts
ID: 2627189 • Letter: J
Question
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2013, net credit sales totaled $4,700,000, and the estimated bad debt percentage is 1.70%. The allowance for uncollectible accounts had a credit balance of $44,000 at the beginning of 2013 and $41,000, after adjusting entries, at the end of 2013.
What is bad debt expense for 2013?
Determine the amount of accounts receivable written off during 2013.
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2013, net credit sales totaled $4,700,000, and the estimated bad debt percentage is 1.70%. The allowance for uncollectible accounts had a credit balance of $44,000 at the beginning of 2013 and $41,000, after adjusting entries, at the end of 2013.
.What is bad debt expense for 2013?
Determine the amount of accounts receivable written off during 2013.
Explanation / Answer
1. What is bad debt expense for 2013?
Bad Debt expense = 1.70% * ($4,700,000) = 79,900
2. Determine the amount of accounts receivable written off during 2013.
Beginning balance of year......................44,000
Add: Bad debt expense 2013.................79,900
Less: End-of-year balance.....................(41,000)
Account Receiveable written off.............82,900
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