Question
PMM Corp. had accounts receivable of $549,500 (including $490,000 due in 3 months, $55,000 due in 1 month, and $4,500 past due) at the end
PMM Corp. had accounts receivable of $549,500 (including $490,000 due in 3 months, $55,000 due in 1 month, and $4,500 past due) at the end of July 2020.
It estimated that uncollectible amounts are expected to be 35% of outstanding accounts receivable past due, 5% of those due in 1 month, and 3% of those due in 3 months.
The allowance for doubtful accounts had a balance of of $8,500 (credit) at the beginning of the month and $2,500 were written off during the month.
What is the amount of bad debt expense to be recorded at the end of the month?
please answer with detailed explanation
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