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In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of $83,800. During the year, Dinty wrote off $30,900 of accounts receivable it had attempted to collect and failed. Credit sales for the year were $2,250,000, and cash collections from credit customers totaled $1,820,000. What bad debt expense would Dinty report in its first-year income statement

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Answer:

$114,700

Explanation:

Bad debtsexpense -Write-offs= Change in Allowance balance.

Therefore Bad debts expense =Change in Allowance balance of $83,800 + Write-offs of $30,900= $114,700

The bad debt expense that Dinty report in its first-year income statement is $114,700

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