Bluerock & Company has accounts receivable of $66,000 and an existing positive balance of $500 in...
Bluerock & Company has accounts receivable of $66,000 and an existing positive balance of $500 in the Allowance for Uncollectible Accounts (i.e. the bad debt expense had been over estimated in the prior period). Two-thirds of the accounts receivable are current and one-third is past due. The firm estimates that 2 percent of the current accounts and 5 percent of the past due accounts will prove to be uncollectible.
Compute the bad debt expense for the current period using the aging method.
- $1,980
- $2,480
- $1,480
- $ 880
- None of the above
Homework Answers
C. $1,480
The bad debt expense for the current period using the aging method
($66,000 x 2/3 x 2%) + ($66,000 x 1/3 x 5%) - $500 = $1,480
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