In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000, and cash collections from credit customers totaled $1,950,000.
-What bad debt expense would Dinty report in its first-year income statement?

Question

In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000, and cash collections from credit customers totaled $1,950,000. 
-What bad debt expense would Dinty report in its first-year income statement?

Quizplus · Accepted Answer

Bad debts expense - Write-offs = Change in Allowance balance.
So, Bad debts expense = Change in Allowance balance of $82,000 + Write-offs of $32,000 = $114,000.

In the Balance Sheet at the End of Its First