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Libre, Inc. has experienced bad debt losses of 5% of credit sales in prior periods. At the end of the year, the balance of Accounts Receivable is $120,000 and the Allowance for Doubtful Accounts has an unadjusted credit balance of $1,500. Net credit sales during the year were $190,000. Using the percentage of credit sales method, what is the estimated Bad Debt Expense for the year

Respuesta :

Answer:

$9,500

Explanation:

Relevant Data provided

Net Credit Sales during the year = $190,000

Estimated percentage of bad debt = 5%

The solution of estimated Bad Debt Expense for the year is provided below:-

Estimated Bad Debt Expense for the year = Net Credit Sales during the year × Estimated percentage of bad debt

= $190,000 × 5%

= $9,500

So, we have calculated the estimated Bad Debt Expense for the year by multiply the net credit sales with estimated percentage of bad debt.

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