A/r method for recognizing bad debt expense

Reference no: EM13666176

During the year the sales department wrote off $250,000 of accounts receivable. They have now decided that 7% of their ending A/R balance is uncollectible. BSO uses the % of A/R method for recognizing bad debt expense.

Account Balance
Year 2 Year 1
A/R $1,500,000 $1,400,00
Allowance for Bad Debts $50,000 $40,000

Reference no: EM13666176

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