How much should red rock report as bad debt expense

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Question - On its December 31, 2020, balance sheet, Red Rock Candle Company reported accounts receivable of $ 855,000 net of an allowance for doubtful accounts of $45,000. On December 31, 2021, Red Rock's balance sheet showed gross accounts receivable of $ 922,000, and Red Rock's income statement reported credit sales of $ 3,000,000. During the year, accounts receivable of $ 35,000 were written off and $ 18,000 were recovered. Based on past experience, 5 % of Red Rock's ending accounts receivable are uncollectible. How much should Red Rock report as bad debt expense on its 2021 income statement?

Reference no: EM133129055

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