At the beginning of 2017, Cyrus Corp.'s allowance for doubtful accounts is $12,500.
During 2017, $4,250 was written off as uncollectible. At December 31, the company used an aging schedule of accounts receivable and determined that $10,530 of the accounts receivable would probably be uncollectible. What would be the bad debt expense that should be reported on Cyrus's 2017 income statement?
A)$5,720
B)$26,780
C)$2,280
D)$18,280

Question

Quizplus · Accepted Answer

The bad debt expense is calculated as the ending balance of the allowance for doubtful accounts minus the beginning balance, plus the amount written off during the year. Beginning balance = $12,500, Amount written off = $4,250, Desired ending balance = $10,530. Bad debt expense = $10,530 - $12,500 + $4,250 = $2,280.

At the Beginning of 2017, Cyrus Corp