At December 31, 2009, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $311,000 and $970 in the allowance for uncollectible accounts, following 2009 write-offs of $6,450 in bad debts. An analysis of Amy Jo's December 31, 2009, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2009 should be:

Question

Quizplus · Accepted Answer

The correct answer is C.The allowance for uncollectible accounts should be 2% of accounts receivable, or $6,220 ($311,000 * 2%). The bad debt expense for 2009 is the difference between the new allowance and the old allowance, or $5,250 ($6,220 - $970).

At December 31, 2009, Amy Jo's Appliances Had Unadjusted Account