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Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2019,...

Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2019, to be $181,000, based on an aging schedule of accounts receivable. Clark has also provided the following information:

  • The accounts receivable balance on December 31, 2019 was $194,200.
  • Uncollectible accounts receivable written off during 2019 totaled $13,600.
  • The allowance for doubtful accounts balance on January 1, 2019 was $18,200.

How much is Clark's 2019 bad debt expense?

Multiple Choice

A)$13,200.

B)$8,600.

C)$4,600.

D)$17,800.

Business   Accounting   
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Answer #1
Allowance for doubtful accounts balance on December 31, 2019 = Accounts receivable balance on December 31, 2019 - Net realizable value of accounts receivable as of December 31, 2019
=194200-181000
=$13200
Unadjusted Allowance for doubtful accounts balance on December 31, 2019 = Allowance for doubtful accounts balance on January 1, 2019 - Uncollectible accounts receivable written off during 2019
= $18200-13600
=$4600
Bad debt expense = Allowance for doubtful accounts balance on December 31, 2019 - Unadjusted Allowance for doubtful accounts balance on December 31, 2019
=13200-4600
=$8600
Correct option :B)$8,600.
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