Ask Question
30 May, 13:00

Becky had net credit sales in 2020 of $2,000,000. At December 31, 2020, before adjusting entries, the balances in selected accounts were: accounts receivable $1,700,000 debit, and allowance for doubtful accounts $2,200 credit. Becky estimates that 8% of its credit sales will prove to be uncollectible.

What is the ending balance in the bad debt expense reported on December 31, 2020?

+1
Answers (1)
  1. 30 May, 15:02
    0
    Following Becky's estimation, the bad debt expense must be equal than the 8% of the total credit, less the value already booked in the balance sheet accounts (doubtful accounts).

    Explanation:

    In this case, 2,000,000*8%=160,000. Then this 160,000 must be subtracted to 2,200 (160,000-2,200=157,800). Finally, the bad debt expense to be reported is $157,800
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Becky had net credit sales in 2020 of $2,000,000. At December 31, 2020, before adjusting entries, the balances in selected accounts were: ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers