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23 January, 10:02

Assume Zap industries reported the following adjusted account balances at year-end. 2019 2018 Accounts Receivable $ 1,730,200 $ 1,380,920 Allowance for Doubtful Accounts (96,000) (79,900) Accounts Receivable, Net $ 1,634,200 $ 1,301,020 Assume the company recorded no write-offs or recoveries during 2019. What was the amount of Bad Debt Expense reported in 2019?

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  1. 23 January, 12:14
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    The amount of Bad Debt Expense reported in 2019 was $16,100.

    Explanation:

    Our concern is mainly on the allowance for doubtful accounts. Based on the facts given in the question, the opening balance of the allowance account was $79,900 credit balance, while the closing balance was $96,000 credit. Since there were no write-offs or recoveries during 2019, the bad debt expense is simply the difference between the closing balance and the opening balance i. e, $96,000 - $79,900 = $16,100.

    The journal entries will be:

    Debit Bad debt expense $16,100

    Credit Allowance for doubtful account $16,100

    (To record the bad debt expense for 2019)
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