The Soft Company has provided the following information:
Allowance for doubtful accounts increased $19,000 and accounts receivable increased
$390,000 during the year.
Accounts written off as uncollectible totaled $20,000.
Net sales totaled $2,700,000.
The gross profit percentage was 40%.
Sales discounts were $100,000.
How much was Soft's bad debt expense?

Question

The Soft Company has provided the following information:
 Allowance for doubtful accounts increased $19,000 and accounts receivable increased 
 $390,000 during the year.
 Accounts written off as uncollectible totaled $20,000.
 Net sales totaled $2,700,000.
 The gross profit percentage was 40%.
 Sales discounts were $100,000.
How much was Soft's bad debt expense?

Quizplus · Accepted Answer

Bad debt expense ($39,000) = Increase in allowance for uncollectible accounts ($19,000) + Accounts written off as uncollectible ($20,000).

The Soft Company Has Provided the Following Information