A company producing coffee began the year with an allowance for Bad Debts at $22,000.
During the year, $25,000 of accounts receivable were written off.
The adjusted balance in allowance for Bad Debts on the end-of-year balance sheet was $27,000.
Question: What is the amount of bad debt expense for the year?
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Allowance for Doubtful Debts Account
(a) Allowance for Doubtful Accounts-Beginning balance $22000
(b) Less: Accounts receivable written off during the year $25000
(c) Balance left (Dr) before year-end adjustments
(e) Bad Debts Expenses for the year estimated 30000
(d) Adjusted balance of Allowance for doubtful account
at the end of year- Credit balance (e-c) $27000
Note: In ...
This solution contains step-by-step instructions to illustrate the allowance for doubtful debts account and determines the amount of bad debt expense for the year with complete justifications.