The following information is from the records of Armadillo Camera Shop:
$$\begin{array} { | l | l | }
\hline \text { Accounts receivable, 31 December 2016 } & \$ 85,000 \text { (debit) } \
\hline \text { Net credit sales for 2016 } & 160,000 \
\hline \text { Accounts written off as uncollectable during 2016 } & 15,000 \
\hline \text { Cash sales during 2016 } & 41,000 \
\hline
\end{array}$$
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 Armadillo Camera Shop:
$$\begin{array} { | l | l | } 
\hline \text { Accounts receivable, 31 December 2016 } & \$ 85,000 \text { (debit) } \
\hline \text { Net credit sales for 2016 } & 160,000 \
\hline \text { Accounts written off as uncollectable during 2016 } & 15,000 \
\hline \text { Cash sales during 2016 } & 41,000 \
\hline
\end{array}$$
The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?

Quizplus · Accepted Answer

The direct write-off method of accounting for bad debts expenses the amount of the specific uncollectible account at the time the account is determined to be uncollectible.

The Following Information Is from the Records of Armadillo Camera