The Soft Company has provided the following information after year-end adjustmen

Question

The Soft Company has provided the following information after year-end adjustments:

• Allowance for doubtful accounts was $11,000 at the beginning of the year and $37,200 at the end of the year.

• Accounts receivable were $87,200 at the beginning of the year and $438,000 at the end of the year.

• Accounts written off as uncollectible totaled $29,000. • Net sales totaled $2,880,000.

•Sales discounts were $118,000. How much was Soft’s bad debt expense for the year?

$26,200.

$2,800.

$29,000.

$55,200.

How much was Soft’s bad debt expense for the year?

Explanation / Answer

Allowance A/c

Debit

Credit

Uncollectible

29,000

Opening bal

11,000

Bad debts

55,200

Balance

37,200

Bad debts expense = 11,000 -29,000 +55,200

                                  =$37,200

Allowance A/c

Debit

Credit

Uncollectible

29,000

Opening bal

11,000

Bad debts

55,200

Balance

37,200

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