On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allo

Question

On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $50,000 and $1,350, respectively. During 2016, Coolwear wrote off $625 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $4,700 at December 31, 2016. Bad debt expense for 2016 would be:

$6,675.

$3,475.

$625.

$3,975.

On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $50,000 and $1,350, respectively. During 2016, Coolwear wrote off $625 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $4,700 at December 31, 2016. Bad debt expense for 2016 would be:

Explanation / Answer

Allowance for uncollectible accounts as onDecember 31 2016 4700 Allowance for uncollectible accounts as onDecember 31 2015 1350 Difference Bad debts expense for 2016 3350 Additional write off in accounts receivable 625 Total bad debts expense for 2016 3975 Hence last option is the correct option

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