Prior to the adjusting entry for bad debt expense, Blueberry, Inc.'s balances for Accounts Receivable and Allowances for Doubtful Accounts were $750,000 (debit) and $5,500 (credit), respectively. After the bad debt expense entry was posted, the net realizable value of accounts receivable was $675,000. Bad debt expense for the year

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The net realizable value of accounts receivable is calculated as Accounts Receivable minus Allowance for Doubtful Accounts. Initially, the Allowance for Doubtful Accounts is $5,500. To achieve a net realizable value of $675,000, the Allowance for Doubtful Accounts must be $75,000 ($750,000 - $675,000). Therefore, the bad debt expense is the difference between the new allowance and the old allowance: $75,000 - $5,500 = $69,500.

Prior to the Adjusting Entry for Bad Debt Expense, Blueberry