The following information is related to December 31 2021 balances. $\begin{array}{lr}
\text { Accounts receivable } & \$ 1,400,000 \
\text { Allowance for doubtful accounts } & 120,000 \
\text { Cash realizable value } & 1,280,000
\end{array}$ During 2022 sales on account were $390000 and collections on account were $230000.Also during 2022 the company wrote off $22000 in uncollectible accounts.An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $144000.Bad debt expense for 2022 is:
A)$46000.
B)$24000.
C)$144000.
D)$ 2000.

Question

Quizplus · Accepted Answer

The beginning allowance for doubtful accounts is $120,000. After writing off $22,000, the allowance is reduced to $98,000. The required ending balance is $144,000, so the bad debt expense for 2022 is $144,000 - $98,000 = $46,000.

The Following Information Is Related to December 31 2021 Balances