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Smithson Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of $20,000. During 2012, it wrote off $14,400 of accounts and collected $4,200
Smithson Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of $20,000. During 2012, it wrote off $14,400 of accounts and collected $4,200 on accounts previously written off. The balance in Accounts Receivable was $400,000 at 1/1 and $480,000 at 12/31. At 12/31/12, Smithson estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2012?
a. $4,000.
b. $14,200.
c. $18,400.
d. $24,000.
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