Question

Case Co.’s balances in Allowance for Doubtful Accounts were $25,000 at the beginning of the current year and $18,000 at year end. During the year, receivables of $10,000 were written off as uncollectible. What amount should Case report as bad debt expense at year end?

Answer 1

Answer:

The bad debt expense for the year is 3,000 dollars

Explanation:

We should solve for the bad debt expense with a reverse engineer on the allowance T account

                                       Allowance

                               DEBIT           CREDIT    

Beginning                                    25,000

write-off                  10,000

bad debt                                          X          

Ending                                          18,000

25,000 - 10,000 + X = 18,000

15,000 + X = 18,000

X = 18,000 - 15,000

X =  3,000