The unadjusted trial balance at the end of the year includes the following: The company uses the allowance method and has completed the aging schedule which indicates $5,800 of accounts are estimated uncollectible.What is the amount of bad debt expense to be recorded for the year?
A)$5,800
B)$4,800
C)$6,800
D)$7,800

Question

The unadjusted trial balance at the end of the year includes the following:  The company uses the allowance method and has completed the aging schedule which indicates $5,800 of accounts are estimated uncollectible.What is the amount of bad debt expense to be recorded for the year?
A)$5,800 
B)$4,800 
C)$6,800 
D)$7,800

Quizplus · Accepted Answer

The aging schedule has indicated $5,800 of accounts that are estimated uncollectible, therefore the bad debt expense to be recorded for the year would be the ending balance of the allowance for doubtful accounts account minus the beginning balance. The beginning balance of the allowance for doubtful accounts account cannot be determined from the information given, therefore the amount of bad debt expense cannot be determined precisely. However, since the aging schedule only shows the estimated uncollectible accounts, it would be appropriate to use this amount as the best estimate for calculating the bad debt expense. Therefore, the amount of bad debt expense to be recorded for the year is $5,800.

The Unadjusted Trial Balance at the End of the Year