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Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $24,000. The unadjusted balance for the Allowance for Doubtful Accounts is $8,000 credit.
-What is the amount of bad debts expense for the year?
A)$32,000
B)$24,000
C)$16,000
D)$ 8,000

Question

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Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $24,000. The unadjusted balance for the Allowance for Doubtful Accounts is $8,000 credit.
-What is the amount of bad debts expense for the year?
A)$32,000
B)$24,000
C)$16,000
D)$ 8,000

Quizplus · Accepted Answer

The bad debts expense is calculated by adjusting the Allowance for Doubtful Accounts to the estimated uncollectible amount. The estimated uncollectible accounts are $24,000, and the current credit balance is $8,000. Therefore, the bad debts expense is $24,000 - $8,000 = $16,000.

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