Question

The required balance in Wheeler’s Allowance for Doubtful Accounts is $36,750, based on an aging of its accounts receivable. The Allowance for Doubtful Accounts currently has a debit balance of $4,200. Wheeler’s bad debt expense for the period is

Answer 1

Answer:

$40,950

Explanation:

The balance which exist in allowance for doubt accounts is considered under the percentage-of-receivables method.

Allowance for Doubtful Accounts + Debit Balance Allowance for Doubtful Accounts (currently).

($36,750 + $4,200) = $40,950

Therefore the Wheeler’s bad debt expense for the period is $40,950