The following information is related to December 31 2021 balances. $\begin{array}{lr}
\text { Accounts receivable } & \$ 3,150,000 \
\text { Allowance for doubtful accounts } & 270,000 \
\text { Cash realizable value } & \$ 2,880,000
\end{array}$ During 2022 sales on account were $870000 and collections on account were $516000.Also during 2022 the company wrote off $48000 in uncollectible accounts.An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $324000.Bad debt expense for 2022 is
A)$102000.
B)$ 54000.
C)$324000.
D)$ 6000.

Question

Quizplus · Accepted Answer

The allowance for doubtful accounts needs to be adjusted to $324,000. The beginning balance was $270,000, and $48,000 was written off, leaving $222,000. To reach $324,000, an additional $102,000 is needed as bad debt expense.

The Following Information Is Related to December 31 2021 Balances