The Soft Company has provided the following information after year-end adjustments: • Allowance for doubtful accounts was $11,000 at the beginning of the year and $30,000 at the end of the year.
• Accounts receivable were $80,000 at the beginning of the year and $420,000 at the end of the year.
• Accounts written off as uncollectible totaled $20,000.
• Net sales totaled $2,700,000.
• Sales discounts were $100,000.
What was the amount of Soft's bad debt expense for the year?
A)$39,000.
B)$1,000.
C)$19,000.
D)$20,000.

Question

Quizplus · Accepted Answer

The bad debt expense can be calculated by adjusting the opening balance of the allowance for doubtful accounts for write-offs and the ending balance. Starting with $11,000, adding the bad debt expense, subtracting $20,000 for write-offs, the balance should equal the ending allowance of $30,000. Solving for the bad debt expense gives us $39,000 ($11,000 + Bad Debt Expense - $20,000 = $30,000).

The Soft Company Has Provided the Following Information After Year-End