Determining Bad Debt Expense On December 31, 2001, Bethel Manufacturing had accounts receivable of

$180,000 and determined a need for an allowance for uncollectible accounts in the amount of $35,000. During 2002, Bethel made sales of $980,000 and collected $1,000,000 of receivables. Also during 2002, Bethel was forced to write off as uncollectible $19,000 of its receivables from 2001 and

$41,000 of its 2002 sales. At December 31, 2002, Bethel concluded that it needed an allowance for uncollectibles of

$26,000, all of which applies to accounts receivables recorded in 2002.

a. Would you expect Bethel Manufacturing to report bad debt expense for 2002? If not, why not? If reported, in what amount?

b. Prepare an analysis of Accounts Receivable and the Allowance for Uncollectible Accounts for 2002.

c. In 2001, bad debt expense was 6 percent of credit sales.
The management of Bethel Manufacturing budgeted a 4 percent bad debt expense in 2002. Was the company successful in its efforts to reduce bad debt losses in 2002?