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at the year end, Chief company has a balance of $16,000 in accounts receivable of which...

at the year end, Chief company has a balance of $16,000 in accounts receivable of which $1,600 is more than 30 days overdue. Chief has a credit balance of $160 in the allowance for doubtful accounts before any year-end adjustments. using the aging of accounts receivable method, Chief estimates that 1.5% of current accounts and 11% of accounts over 30 days are uncollectible. what is the amount of bad debt expense? a 232. b 392. c 552. d160.

Solutions

Expert Solution

Correct answer-------------(a) $232

Working

Accounts receivables x Percent Uncollectable (%) = Estimated Uncollectable
Current $        14,400.00 x 1.50% = $          216.00
More than 30 days due $          1,600.00 x 11.00% = $          176.00
Estimated balance of allowance for doubtful accounts $          392.00

.

Estimated balance of allowance for uncollectables $            392.00 Cr
Balance in Allowance for uncollectable account (Cr) $            160.00 Cr
Total bad debts to be recorded $            232.00 Cr

ekkarill92 answered 1 year ago
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