King Co.'s allowance for uncollectible accounts was $95,000 at the end of 2007 and $90,000 at the end of 2006.For the year ended December 31, 2007, King reported bad debt expense of $13,000 in its income statement.What amount did King debit to the appropriate account in 2007 to write off actual bad debts?

Question

Quizplus · Accepted Answer

The allowance for uncollectible accounts decreased by $5,000 from 2006 to 2007 ($95,000 - $90,000). Since King reported a bad debt expense of $13,000, the write-off amount must have been $13,000 (expense) - $5,000 (decrease in allowance) = $8,000.

King Co'S Allowance for Uncollectible Accounts Was $95,000 at the End