Trainor Company estimates bad debt expense using a percentage of credit sales (5%). The company began its current year with an $8,500 balance in the allowance account. During the current year, $10,500 of accounts receivable were written off, and $1,200 of previously written off accounts were collected. Credit sales for the year were $255,000. The bad debt expense for the year wasa) $12,750b) $11,550c) $10,500d) $8,500

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Business

Judd

19 June, 00:18

Trainor Company estimates bad debt expense using a percentage of credit sales (5%). The company began its current year with an $8,500 balance in the allowance account. During the current year, $10,500 of accounts receivable were written off, and $1,200 of previously written off accounts were collected. Credit sales for the year were $255,000. The bad debt expense for the year wasa) $12,750b) $11,550c) $10,500d) $8,500

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Adelaide Mitchell · Answer 1

a) $12,750

Explanation:

The computation of the bad debt expense is shown below:

= Credit sales * estimated percentage given

= $255,000 * 5%

= $12,500

Simply we multiplied the credit sales with the given estimated percentage so that the accurate amount can come i. e bad debt expense for the particular year

All other information which is given is not relevant. Hence, ignored it