A newly created design business, Teri's Art, is finishing its first year of operations. During the year, credit sales were $43,000 and collections of credit sales were $34,000. One account for $675 was written off. Teri's Art uses the aging-of-receivables method to account for bad debts expense. It has estimated $200 as uncollectible at year-end. What is the amount of the Bad Debts Expense for the first year of operations?

Question

Quizplus · Accepted Answer

The Bad Debts Expense for the first year is calculated by adding the amount written off ($675) to the estimated uncollectible amount at year-end ($200), totaling $875.

A Newly Created Design Business, Teri's Art, Is Finishing Its