Ask Question
10 December, 04:15

Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year Beluga wrote off uncollectible receivables of $2,500. Beluga recorded Bad Debts Expense of $3,300. What is Beluga's year-end balance in Allowance for Bad Debts?

+4
Answers (1)
  1. 10 December, 04:44
    0
    Beluga's year-end balance in Allowance for Bad Debts is $1800

    Explanation:

    Given that the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year, Beluga wrote off uncollectible receivables of $2,500. To do this, a debit would have been passed to Bad Debts Expense and a credit to receivable.

    If the Bad Debts Expense amounted to $3,300 then the additional $800 ($3,300 - $2,500) would have been as a result of additional allowances for bad debt which would have been passed as a credit to Allowance for Bad Debts $800 and a debit to Bad Debts Expense $800.

    This would make the total debits or balance in the Bad Debts Expense to $3,300 (2500 + 800) while the balance in the Allowance for Bad Debts would be $1800 made up of the opening balance of $1000 and the $800 posted during the year.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers