Smithson Corporation had a $1/1/22$ balance in the Allowance for Doubtful Accounts of $10,000.$ During $2022,$ it wrote off $7,200$ of accounts and collected $2,100$ on accounts previously written off. The balance in Accounts Receivable was $200,000$ at $\frac{1}{1}$ and $240,000$ at $\frac{12}{31}.$ At $\frac{12}{31}\frac{?}{22},$ Smithson estimates that $5\%$ of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for $2022?$

a$.2,000$

c$.9,200$

d$.12,000$

Ans: b

LO: $3$

Bloom: AN

Difficulty: Hard

Min: $5$

AACSB: Analytic

AICPA BB: Strategic$/$Critical Thinking

AICPA FN: Measurement

AICPA PC: Problem Solving and Decision$-$making

IMA: None

$108.$ Black Corporation had a $1/1/22$ balance in the Allowance for Doubtful Accounts of $12,000.$ During $2022,$ it wrote off $8,640$ of accounts and collected $2,520$ on accounts previously written off. The balance in Accounts Receivable was $240,000$ at $\frac{1}{1}$ and $288,000$ at $\frac{12}{31}.$ At $\frac{12}{31}\frac{?}{22},$ Black estimates that $5\%$ of accounts receivable will prove to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at $12/31/22?$