Super Corp. reported credit sales of $2,000,000, cash sales of $200,000 and bad debt write-offs of $100,000 for last year. The ending balance in accounts receivable was $4,500,000. Bad debt expense was $250,000. The allowance for doubtful accounts had a balance of $400,000 at the beginning of the year. What was the balance in the allowance for doubtful accounts at the end of the year?

Question

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The balance in the allowance for doubtful accounts at the end of the year is calculated as follows: Beginning balance + Bad debt expense - Bad debt write-offs = Ending balance. Therefore, $400,000 + $250,000 - $100,000 = $550,000.