Empire has a credit balance of $750 in its Allowance for Doubtful Accounts.The balance it the Accounts Receivable account is $80,500,with $2,415 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Question

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Under the balance sheet approach, the Bad Debt Expense is equal to the desired ending balance in the Allowance for Doubtful Accounts, minus the existing credit balance. Therefore, the calculation is $2,415 (desired ending balance) - $750 (existing credit balance) = $1,665. So the debit to Bad Debt Expense will be $1,665.

Empire Has a Credit Balance of $750 in Its Allowance