The amount of uncollectible accounts at the end of the year is estimated to be $25,000 using the aging of accounts receivable method.The balance in the Allowance for Doubtful Accounts account is an $8,000 credit before adjustment.Assuming no accounts are written off during the period,what will be the amount of bad debt expense for the period?
A)$8,000.
B)$17,000.
C)$25,000.
D)$33,000.

Question

Quizplus · Accepted Answer

The bad debt expense for the period is the difference between the estimated uncollectible accounts and the balance in the Allowance for Doubtful Accounts account after adjustment.

The balance in the Allowance for Doubtful Accounts account needs to be adjusted to reflect the estimated uncollectible accounts of $25,000.

Adjustment required: 
Estimated uncollectible accounts: $25,000 
Balance in Allowance for Doubtful Accounts account (before adjustment): $8,000 CR 
Adjustment required: $25,000 - $8,000 = $17,000

Therefore, the bad debt expense for the period is $17,000. Option B is correct.

The Amount of Uncollectible Accounts at the End of the Year