The following information is from the records of Mountainview Camera Shop: $$\begin{array} { | l | r | }
\hline \text { Accounts receivable, December 31, 2018 } & \$ 80,000 \text { (debit) } \
\hline \text { Net credit sales for 2018 } & 160,000 \
\hline \text { Accounts written off as uncollectible during 2018 } & 16,000 \
\hline \text { Cash sales during 2018 } & 42,000 \
\hline
\end{array}$$ The company uses the direct write-off method for bad debts. What is the amount of bad debts expense?

Question

The following information is from the records of Mountainview Camera Shop: $$\begin{array} { | l | r | } 
\hline \text { Accounts receivable, December 31, 2018 } & \$ 80,000 \text { (debit) } \
\hline \text { Net credit sales for 2018 } & 160,000 \
\hline \text { Accounts written off as uncollectible during 2018 } & 16,000 \
\hline \text { Cash sales during 2018 } & 42,000 \
\hline
\end{array}$$ The company uses the direct write-off method for bad debts. What is the amount of bad debts expense?

Quizplus · Accepted Answer

Under the direct write-off method, the bad debts expense is equal to the amount of accounts written off as uncollectible during the year, which is $16,000.

The Following Information Is from the Records of Mountainview Camera