Find the amount of bad debts expense recognized

Reference no: EM132833084

Question - On January 1, 2016, the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000 and $550 respectively. During the year, the company reported $70,000 of credit sales. There were $400 of receivables written off as uncollectible in 2016. Cash collections of receivables amounted to $74,700. The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance.

Find the amount of bad debts expense recognized in the 2016 income statement?

a. $545

b. $595

c. $745

d. $795

Reference no: EM132833084

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