Reference no: EM132729435

Hopper Inc. follows the balance sheet approach in preparing its allowance for doubtful accounts (AFDA). The opening AFDA balance as at January 1, 20X3, was a credit of $8,700. During the 20X3 fiscal year, a total of $7,860 was written off as uncollectable for the year and a total of $650 in previously written-off accounts was recovered.

Hopper has the following accounts receivable balances as at December 31, 20X3, including a breakdown of the percentage estimated by management to be uncollectable:

Days outstanding                            Balance                 % estimated to be uncollectable
0-30 days                                   $480,520                         0.5%

31-60 days                                 187,600                        1.8%

61-90 days                                77,250                            2.5%

Greater than 90 days                       38,760                         4.5%

Problem 1: What is the total amount of bad debt expense that Hopper needs to record for the December 31, 20X3, fiscal year? Round to the nearest dollar.

a) $ 7,965

b) $ 8,615

c) $ 9,455

d) $10,945