During 2016, Blueberry, Inc. recovered and collected $4,200 from an account that had been written off for over a year. At the end 2016, prior to the adjusting entry for bad debt expense, Blueberry, Inc.'s balances for Accounts Receivable and Allowances for Doubtful Accounts were $750,000 debit) and $5,500 credit), respectively. After the bad debt expense entry was posted, the net realizable value of accounts receivable was $675,000. Bad debt expense for the 2016 was

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The net realizable value of accounts receivable is calculated as Accounts Receivable minus Allowance for Doubtful Accounts. Before the bad debt expense entry, the net realizable value was $750,000 - $5,500 = $744,500. After the entry, it was stated to be $675,000. This means the Allowance for Doubtful Accounts must have been increased by the difference between the two net realizable values, which is $744,500 - $675,000 = $69,500. This increase in the allowance account is the bad debt expense for the year.