Question

The CHS Company has provided the following information:

• Accounts receivable written-off as uncollectible during the year amounted to $13,400.
• The accounts receivable balance at the beginning of the year was $340,000.
• The accounts receivable balance at the end of the year was $400,000.
• The allowance for doubtful accounts balance at the beginning of the year was $15,900.
• The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $14,800.
• Credit sales during the year totaled $995,000.

How much was CHS Company's bad debt expense?

Answer 1

CHS Company's bad debt expense =  $ 12,300

Explanation

Ending allowance for doubtful accounts = Beginning allowance for doubtful accounts - Accounts receivable write-offs

+ Bad debt expense

$14,800 =  $15,900 - $13,400 + Bad debt expense

$14,800 = $2,500 + Bad debt expense

Therefore, Bad debt expense = $14,800 - $2,500

= $ 12,300