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hdwoody2002
25.06.2021 •
Business
As of December 31, 2017, Gill Co. reported accounts receivable of $218,000 and an allowance for uncollectible accounts of $9200. During 2018, accounts receivable increased by $22,900, (that change includes $7350 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2018, accounts receivable suggests that the allowance for doubtful accounts should be 4% of accounts receivable. Bad debt expense for 2018 would be:
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Ответ:
$7,786
Explanation:
Calculation to determine what Bad debt expense for 2018 would be:
First step is to calculate the Estimated bad debts
Estimated bad debts= 0.04 × ($218,000 + $22,900)
Estimated bad debts=0.04*$240,900
Estimated bad debts=$9,636
Second step is to calculate the allowance
Allowance = $9,200 - $7,350
Allowance = $1,850
Now let calculate the Bad debt expense
Using this formula
Bad debt expense = Estimated bad debts - Allowance
Let plug in the formula
Bad debt expense =$9,636 -$1,850 Bad debt expense =$7,786
Therefore Bad debt expense for 2018 would be:$7,786
Ответ: