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Bad Debt Expense

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At December 31, Amy Jo's Appliances had adjusted account balances in accounts receivable of $311,000 and $970 (debit) in the allowance for uncollectible accounts. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be:

1. $6,220.
2. $6,450.
3. $5,250.
4. $7,190

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The solution does a great job of answering the question. The solution is brief and concise and very easy to follow along. It can be easily understood by anyone with a basic understanding of Accounting. Overall, an excellent solution.

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(4) $7,190 is the correct answer.

Allowance for noncollectable account is a contra account to Account Receivable ...

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