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WLC has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?a. $ 532,000.b. $ 520,000.c. $1,920,000.d. $ 508,000.

Respuesta :

Answer:

$508,000

Explanation:

Outstanding Receivables as on Dec 31 = $6,500,000

    Required uncollectible receivables = 8% of $6,500,000 = $520,000

    Less Opening allowance for doubtful debts                         $12,000

    Allowance to be recognized this year                                  $508,000  

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