Respuesta :
The amount of bad debt expense will the company actually record is c)$139500.
So, correct option is c.
We have some details like total account receivable as $1800000
allowance for doubtful accounts as $40,500
Now, we have also percentage of bad debt expense as 10% of accounts receivable.
So,10% of of accounts receivable=(10/100)×1800000=$180000
Now, for getting information of bad debt expense we need to subtract allowance for doubtful accounts.
So, bad debt expense=10% of account receivable - allowance for doubtful debts
=>bad debt expense=$180000-$40500=$139,500
Hence, amount of bad debt expense is $139,500
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(Complete question) is:
Sheffield Corp. unadjusted trial balance includes the following balances (assume the normal balances): Accounts receivable as $1800000. Allowance for doubtful accounts as $40500. Bad debts are estimated to be 10% of the outstanding receivables. What amount of bad debt expense will the company actually record?
a)$137370
b)$182500
c)$139500
d)$177130
