The data below is for Music Corporation for 2016. $$\begin{array} { l r }
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2016?
A) $8,000
B) $8,100
C) $8,700
D) $8,900

Question

The data below is for Music Corporation for 2016. $$\begin{array} { l r } 
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2016?
A) $8,000
B) $8,100
C) $8,700
D) $8,900

Quizplus · Accepted Answer

The aging approach estimates bad debt expense as the difference between the estimated uncollectible accounts and the allowance for doubtful accounts. The estimated uncollectible accounts are $9,600 and the allowance for doubtful accounts is $8,700, so the bad debt expense is $9,600 - $8,700 = $8,900.

The Data Below Is for Music Corporation for 2016 -Refer to the Data for Music Corporation