The CHS Company has provided the following information: Accounts receivable writ
ID: 2563918 • Letter: T
Question
The CHS Company has provided the following information: Accounts receivable written-off as uncollectible during the year amounted to $12,700. The accounts receivable balance at the beginning of the year was $270,000. The accounts receivable balance at the end of the year was $330,000. The allowance for doubtful accounts balance at the beginning of the year was $15,200. The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $14,100. Credit sales during the year totaled $960,000.
How much was CHS Company's bad debt expense?
Explanation / Answer
Answer: Ending allowance for doubtful accounts = Beginning allowance for doubtful accounts – Accounts Receivable Write offs + Bad debts expenses
Thus, CHS Company's bad debt expense = $11,600
Particulars Amount Beginning allowance for doubtful accounts $15,200 Less: Accounts Receivable Write offs $12,700 Add: Bad debts expenses (Bal Figure) $11,600 Ending allowance for doubtful accounts $14,100