Weyawega Company reported credit sales of $985,750 during 20X1. On December 31, 20X1, the company had gross accounts receivable of $450,000 and an $18,000 balance in the Allowance for Uncollectible Accounts. The company esitmated Bad Debt Expense at 2% of credit sales. Based on this data, determine the Bad Debt Expense that the company should report on the 20X1 income statement.

The computation of the bad debt expense is shown below:

= (Credit sales * estimated percentage given) - (credit balance of Allowance for Uncollectible Accounts)

= ($985,750 * 2%) - ($18,000)

= $19,715 - $18,000

= $1,715

= (Credit sales * estimated percentage given) + (debit balance of Allowance for Uncollectible Accounts)

= ($985,750 * 2%) - ($18,000)

= $19,715 + $18,000

= $37,715

Since in the question it does not specify that Uncollectible Accounts has debit or credit balance so we computed in the both methods