At December 31,Amy Jo's Appliances had account balances in Accounts Receivable of $311,000 and in Allowance for Uncollectible Accounts of $970 (debit)before any adjustments.An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable.Bad debt expense for the year should be:

Question

Quizplus · Accepted Answer

The required allowance for uncollectible accounts is 2% of $311,000, which is $6,220. Since the current allowance is a $970 debit, we need to adjust it to a $6,220 credit. Therefore, the bad debt expense should be $6,220 + $970 = $7,190.

At December 31,Amy Jo's Appliances Had Account Balances in Accounts