The required balance in Wheeler’s Allowance for Doubtful Accounts is $36,750, based on an aging of its accounts receivable. The Allowance fo

The required balance in Wheeler’s Allowance for Doubtful Accounts is $36,750, based on an aging of its accounts receivable. The Allowance for Doubtful Accounts currently has a debit balance of $4,200. Wheeler’s bad debt expense for the period is

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  1. Answer:

    $40,950

    Explanation:

    The balance which exist in allowance for doubt accounts is considered under the percentage-of-receivables method.

    Allowance for Doubtful Accounts + Debit Balance Allowance for Doubtful Accounts (currently).

    ($36,750 + $4,200) = $40,950

    Therefore the Wheeler’s bad debt expense for the period is $40,950

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