Extreme Sport, Inc. uses the allowance method to account for bad debits. During 2010, the company recorded $560,000 in credit sales. At the end of 2010 and before adjustments, account balances were accounts receivable $180,00, and allowance for uncollectable accounts ($900), If bad debt expense is estimated to be 3% of credit sales, how much bad debts expense will be on that year-end income statement?© BrainMass Inc. brainmass.com March 22, 2019, 1:05 am ad1c9bdddf
Here is my response to your question:
This is how the accounts would be recorded:
An allowance for Bad Debt ...
A look at credit sales reporting and the effect on accounts receivable and allowance for uncollectable accounts.