K-Jones Ltd. reported opening balances of $1,712,000 in accounts receivable and $147,000 in the allowance for doubtful accounts at the beginning of last year. During the year, sales on account totaled $2,500,000, collections of accounts receivable were $1,300,000, bad debt write-offs were $65,000 and bad debt expense was $89,000. What was the ending balance in the allowance for doubtful account?

Question

Quizplus · Accepted Answer

The ending balance in the allowance for doubtful accounts can be calculated using the following formula:

Ending balance = Beginning balance + Bad debt expense - Bad debt write-offs

Beginning balance = $147,000 
Bad debt expense = $89,000 
Bad debt write-offs = $65,000

Ending balance = $147,000 + $89,000 - $65,000 
Ending balance = $171,000

Therefore, the ending balance in the allowance for doubtful accounts is $171,000.