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Maple Co. provides for bad debts expense at the rate of 5.35% of ending Accounts Receivable....

Maple Co. provides for bad debts expense at the rate of 5.35% of ending Accounts Receivable. On Jan 1, 20X1, the Allowance for Bad Debts was $16,000. There were $16,000 of accounts written off during the year. Credit sales for the year were $540,000. Ending Accounts Receivable was $115,000

What is the balance in the Allowance for Bad Debts account?

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Answer #1

Correct answer---------$ 6,152.50 or $6153

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Beginning balance of Allowance for Bad Debts account $   16,000.00
Less: Amount written off $ (16,000.00)
Subtotal $                   -  
Add: Bad debts expense for the year (115000 x 5.35%) $      6,152.50
Ending balance of Allowance for Bad Debts account $      6,152.50
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