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At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $311,000 and in Allowance for Uncollectible Accounts of $970 (credit) before any adjustments. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be:

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Answer:

$5,230

Explanation:

Data given in the question

Account receivable balance = $310,000

Credit balance in allowance for uncollectible accounts = $970

Given percentage = 2%

So by considering the above information, the bad debt expense is

= Account receivable balance × given percentage - credit balance in allowance for uncollectible accounts

= $310,000 × 2% - $970

= $6,200 - $970

= $5,230

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