What amount of bad debt expense should be reported

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Point 1: The Harper Company begins the current year with $300,000 in accounts receivable and $12,000 as the credit balance in the allowance for doubtful accounts. During the year, for interim reporting purposes, the company recognizes bad debts as 1 percent of sales because that approach is easy to apply. At the end of the year, the company adjusts its records so that the allowance account is 4 percent of ending receivables. During the current year, sales were $1.5 million and cash collections were $1.3 million. In addition, $10,000 in accounts were written off as uncollectible.

Question 1: On the income statement for the year, what amount of bad debt expense should be reported?

Reference no: EM132483841

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