Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales,...

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Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales,...

Flyer Company has provided the following information prior to any year-end bad debt adjustment:

Cash sales, $155,000
Credit sales, $455,000
Selling and administrative expenses, $115,000
Sales returns and allowances, $35,000
Gross profit, $495,000
Accounts receivable, $155,000
Sales discounts, $19,000
Allowance for doubtful accounts credit balance, $1,700

Flyer prepares an aging of accounts receivable and the result shows that 5% of accounts receivable is estimated to be uncollectible. How much is bad debt expense?

business accounting

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Answer 1

Answer #1

Bad debts expense

= (155,000*5%) - credit balance in Allowance for Doubtful Accounts

= 7750 - 1700

= 6050

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Answer 2

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