The following information is from the 2019 records of Albert Book Shop: $$\begin{array} { | l | l | }
\hline \text { Accounts receivable, December 31, 2019 } & \$ 45,000 \text { (debit) } \
\hline \text { Allowance for Bad Debts, December 31,2019 prior to adjustment } & 1700 \text { (debit) } \
\hline \text { Net credit sales for } 2019 & 177,000 \
\hline \text { Accounts written off as uncollectible during 2017 } & 20,000 \
\hline \text { Cash sales during 2019 } & 29,500 \
\hline
\end{array}$$ Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5200 of accounts receivable will be uncollectible.Calculate the amount of bad debts expense for 2019.
A) $4300
B) $6900
C) $3500
D) $5450

Question

The following information is from the 2019 records of Albert Book Shop: $$\begin{array} { | l | l | } 
\hline \text { Accounts receivable, December 31, 2019 } & \$ 45,000 \text { (debit) } \
\hline \text { Allowance for Bad Debts, December 31,2019 prior to adjustment } & 1700 \text { (debit) } \
\hline \text { Net credit sales for } 2019 & 177,000 \
\hline \text { Accounts written off as uncollectible during 2017 } & 20,000 \
\hline \text { Cash sales during 2019 } & 29,500 \
\hline
\end{array}$$ Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5200 of accounts receivable will be uncollectible.Calculate the amount of bad debts expense for 2019.
A) $4300
B) $6900
C) $3500
D) $5450

Quizplus · Accepted Answer

The allowance for bad debts needs to be adjusted to $5200. Since the allowance account has a $1700 debit balance, the bad debts expense is $5200 - (-$1700) = $6900.

The Following Information Is from the 2019 Records of Albert