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30 October, 12:21

Quill Industries uses the aging of accounts receivable method. Its estimate of uncollectible receivables resulting from the aging analysis equals $20,000. The unadjusted credit balance in the Allowance for Doubtful Accounts account is $6,400. What is the estimated Bad Debt Expense for the period?

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  1. 30 October, 13:42
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    The estimated Bad Debt Expense for the period is $13,600

    Explanation:

    Quill Industries estimates of uncollectible receivables resulting from the aging analysis equals $20,000. The company uses the aging of accounts receivable method and the Allowance for Doubtful Accounts has credit balance of $6,400 before adjusting.

    Bad debt Expense = $20,000 - $6,400 = $13,600

    The entry:

    Debit Bad debts expense $13,600

    Credit Allowance for doubtful accounts $13,600
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