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Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit.
-What is the amount of bad debts expense for the year?
A)$11,500
B)$10,000
C)$1,500
D)$8,500

Question

Use the following information for questions 
Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit.
-What is the amount of bad debts expense for the year?
A)$11,500
B)$10,000
C)$1,500
D)$8,500

Quizplus · Accepted Answer

The bad debts expense is calculated by adjusting the Allowance for Doubtful Accounts to the estimated uncollectible amount. Since the unadjusted balance is $1,500 credit and the estimated uncollectible accounts are $10,000, the bad debts expense is $10,000 - $1,500 = $8,500.

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