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3 June, 21:31

An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a a. credit to Allowance for Doubtful Accounts for $700 b. debit to Bad Debt Expense for $8,600 c. debit to Bad Debt Expense for $7,900 d. debit to Bad Debt Expense for $7,200

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  1. 3 June, 21:47
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    option d) debit to Bad Debt Expense for $7,200

    Explanation:

    Data provided:

    Total estimated uncollectible receivables of the company = $ 7,900

    credit balance for the allowance for doubtful accounts = $ 700

    Therefore,

    the net bad debt expenses of the company = $ 7,900 - $ 700 = $ 7,200

    Hence,

    the correct answer is option d) debit to Bad Debt Expense for $7,200
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