Nenn Co.'s allowance for uncollectible accounts was $190,000 at the end of 2014 and $180,000 at the end of 2013. For the year ended December 31, 2014, Nenn reported bad debt expense of $26,000 in its income statement. What amount did Nenn debit to the appropriate account in 2014 to write off actual bad debts?

Question

Quizplus · Accepted Answer

To calculate the amount of bad debts actually written off in 2014, we need to determine the change in the allowance for uncollectible accounts from 2013 to 2014. This is calculated as follows:

Allowance for uncollectible accounts 2013: $180,000 
Add: Bad debt expense 2014: $26,000 
Less: Allowance for uncollectible accounts 2014: $190,000 
Change in allowance for uncollectible accounts: ($180,000 + $26,000 - $190,000) = $16,000

Therefore, Nenn would have debited the appropriate account for $16,000 to write off actual bad debts. The correct answer is B.

Nenn Co'S Allowance for Uncollectible Accounts Was $190,000 at the End