English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

At January 1, 2002, Betty DeRose, Inc. had an allowance for doubtful accounts with a $4,200 credit balance. During 2002, Betty recovered $3,000 from customers that had been written off in the previous year. At December 31, 2002, Betty prepared the following aging schedule:
Accounts Receivable % Uncollectible

not past due $100,000 2%
1-30 days past due 50,000 4%
31-60 days past due 20,000 7%
61-90 days past due 10,000 20%
over 90 days past due 8,000 40%

Based on the above information, calculate the amount of bad debt expense recorded by Betty DeRose,Inc. for 2002.

4,200 + 3,000 - (Sum of percentages * amounts = 10,600) = <3,400>

Right?

2007-10-26 19:33:13 · 1 answers · asked by Andrew H 1 in Business & Finance Other - Business & Finance

1 answers

Yes, you are correct. You need an allowance balance of $10,600 but you already have $4,200 so you only need to charge another $6,400 to the income statement. Then you have the bad debt recovered of $3,000 in the income statement, so the net expense in the income statement is $3,400.

2007-10-26 22:16:26 · answer #1 · answered by Sandy 7 · 0 0

fedest.com, questions and answers