Question
Question 2 (5 marks) MH Corp. (MHC) estimates its allowance for doubtful accounts using the balance sheet approach. The following information is available for MHC's
Question 2 (5 marks)
MH Corp. (MHC) estimates its allowance for doubtful accounts using the balance sheet approach. The following information is available for MHC's year ended December 31, 2019:
Allowance for doubtful accounts
Allowance for doubtful accounts, December 31, 2018 (credit)
$157,500
Accounts written off during 2019
175,000
Account recoveries during 2019
3,500
Accounts receivable
0-30 days (98% expected recovery)
$ 653,000
31-60 days (85% expected recovery)
340,000
61-90 days (60% expected recovery)
145,000
91+ days (30% expected recovery)
67,000
Accounts receivable balance, December 31, 2019
$1,205,000
Required: Calculate MHC's bad debt expense for the year ended December 31, 2019. (5 marks)
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