Castle Company provides estimates for its uncollectible accounts. The allowance

Question

Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $17,980 at the beginning of 2016 and a $23,810 credit balance at the end of 2016 (after adjusting entries). If the direct write-off method had been used to account for uncollectible accounts (bad debt expense equals actual write-offs), the income statement for 2016 would have included bad debt expense of $18,500 and revenue of $3,600 from the collection of previously written off bad debts Required Determine bad debt expense for 2016 according to the allowance method Bad debt expense for the year 2016

Explanation / Answer

Calculation of bad debt expense for 2016 according to the allowance method Allowance for uncollectible accounts balance at the end of 2016 $23,810.00 Less : Accounts Receivables reinstated during the year $3,600.00 Less : Allowance for uncollectible accounts balance at the end of 2016 $17,980.00 Bad debt expense for the year 2016 $2,230.00

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