Answer:
$33,400
Explanation:
Given that,
Accounts Receivable = $1,130,000
Allowances for Doubtful Accounts = $23,100
Estimated bad debts:
= 5% of outstanding receivables
= 0.05 × $1,130,000
= $56,500
We simply deduct the allowance for doubtful accounts balance from the estimated bad debts to record the amount of bad debt expense.
Amount of bad debt expense will the company record:
= Estimated bad debts - Allowances for Doubtful Accounts
= $56,500 - $23,100
= $33,400
