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Beautiful Lawns Company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. The Beautiful Lawns Company computes a total of $3,600 in estimated doubtful accounts as of December 31, 2016. Its Accounts Receivable account has a balance of $112,800 and its Allowance for Doubtful Accounts has a credit balance of $600 before adjustment at December 31, 2016. How much bad debts expense will Beautiful Lawns report in 2016

Sagot :

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Answer:

$3,000

Explanation:

Calculation to determine How much bad debts expense will Beautiful Lawns report in 2016

Using this formula

Bad debts expense=Estimated doubtful accounts -Allowance for Doubtful Accounts credit balance

Let plug in the formula

Bad debts expense=$3,600-$600

Bad debts expense=$3,000

Therefore The amount of bad debts expense that Beautiful Lawns will report in 2016 is $3,000

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