Pauline Company estimates the allowance for doubtful accounts by aging its accounts receivable. At the end of 2021, the balance in the allowance account was $50,000. During 2022, the company wrote off $5,000 and collected a $3,000 receivable that had been previously written off as uncollectable. At the end of 2022, the aging schedule indicated that the balance of the allowance for doubtful accounts should be $64,000. What is the bad debt expense for 2022?

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The bad debt expense for 2022 is $16,000. This is calculated as follows:Beginning balance in allowance for doubtful accounts: $50,000Add: Write-offs during the year: $5,000Less: Collections of previously written-off receivables: $3,000Ending balance in allowance for doubtful accounts: $64,000Bad debt expense: $16,000

Pauline Company Estimates the Allowance for Doubtful Accounts by Aging