On December 31 of the current year, TechCom's unadjusted trial balance included the following items: Accounts Receivable, debit balance of $107,250; Allowance forDoubtful Accounts, credit balance of $1,900. What amount should be debited to Bad Debt Expense, assuming 6% of outstanding accounts receivable as of December 31 of the current year, are estimated to be uncollectible?

Question

Quizplus · Accepted Answer

To determine the amount to be debited to Bad Debt Expense, we need to calculate the estimated uncollectible accounts based on the outstanding accounts receivable balance.

Outstanding accounts receivable balance = $107,250 
6% of outstanding accounts receivable = 0.06 x $107,250 = $6,435

Since the current balance in Allowance for Doubtful Accounts is a credit of $1,900, we need to increase the balance by $6,435 - $1,900 = $4,535. This means we need to debit Bad Debt Expense for $4,535.

Therefore, the correct answer is choice D.

On December 31 of the Current Year, TechCom's Unadjusted Trial