Flyer company has provided the following information prior to any year-end bad debt adjustment: cash sales, $153,000 credit sales, $453,000 selling and administrative expenses, $113,000 sales returns and allowances, $33,000 gross profit, $493,000 accounts receivable, $140,000 sales discounts, $17,000 allowance for doubtful accounts credit balance, $1,500 flyer prepares an aging of accounts receivable and the result shows that 3% of accounts receivable is estimated to be uncollectible. what is the balance in the allowance for doubtful accounts after bad debt expense is recorded?

Balance of allowance for doubtful accounts after Bad debt Expense is $2700

Explanation:

given data

Cash sales=  $153,000

Credit sales = $453,000

Selling and administrative expenses = $113,000

Sales returns and allowances= $33,000

Gross profit = $493,000

Accounts receivable = $140,000

Sales discounts = $17,000

doubtful accounts credit balance =  $1,500

solution

we know here Total Bad Debit = 3% of accounts receivable

that is Total Bad Debit =  0.03 × $140,000

Total Bad Debit =  $4200

so here allowance for doubtful account credit balance = $1500

so

Balance of allowance for doubtful accounts after Bad debt Expense will be

Balance of allowance for doubtful accounts =  $4200 - $1500

Balance of allowance for doubtful accounts  = $2700

answer; ///decision making under risk;