Weyawega company reported credit sales of $985,750 during 20x1. on december 31, 20x1, the company had gross accounts receivable of $450,000 and an $18,000 balance in the allowance for uncollectible accounts. the company esitmated bad debt expense at 2% of credit sales. based on this data, determine the bad debt expense that the company should report on the 20x1 income statement.

Explanation:

The computation of the bad debt expense is shown below:

= (Credit sales × estimated percentage given ) - (credit balance of Allowance for Uncollectible Accounts)

= ($985,750 × 2%) -  ($18,000)

= $19,715 - $18,000

= $1,715

= (Credit sales × estimated percentage given ) + (debit balance of Allowance for Uncollectible Accounts)

= ($985,750 × 2%) -  ($18,000)

= $19,715 + $18,000

= $37,715

Since in the question it does not specify that Uncollectible Accounts has debit or credit balance so we computed in the both methods

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