Flyer Company has provided the following information:
Cash sales,$150,000
Credit sales,$450,000
Selling and administrative expenses,$110,000
Sales returns and allowances,$30,000
Gross profit,$290,000
Accounts receivable,$110,000
Sales discounts,$14,000
Allowance for doubtful accounts credit balance,$1,200
How much is Flyer's bad debt expense assuming that 1.5% of credit sales have historically been uncollectible.

Question

Flyer Company has provided the following information:
 Cash sales,$150,000
Credit sales,$450,000
Selling and administrative expenses,$110,000
Sales returns and allowances,$30,000
Gross profit,$290,000
Accounts receivable,$110,000
 Sales discounts,$14,000
 Allowance for doubtful accounts credit balance,$1,200
How much is Flyer's bad debt expense assuming that 1.5% of credit sales have historically been uncollectible.

Quizplus · Accepted Answer

Bad debt expense ($6,750) =1.5% * $450,000

Flyer Company Has Provided the Following Information