On december 31, 2015, coolwear inc. had balances in accounts receivable and allowance for uncollectible accounts of $43,000 and $1,250, respectively. during 2016, coolwear wrote off $775 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,600 at december 31, 2016. bad debt expense for 2016 would be:

Bad debt expense $5.125

Explanation:

Initial Balance    

Accounts Receivable  $ 43.000  

Allowance for Uncollectible Accounts  $ 1.250

Entry    

Allowance for Uncollectible Accounts  $ 775  

Accounts Receivable  $ 775

New Balance    

Accounts Receivable  $ 42.225  

Allowance for Uncollectible Accounts  $ 475

Entry Adjustment

Bad debt expense  $ 5.125  

Allowance for Uncollectible Accounts  $ 5.125

END Balance    

Accounts Receivable  $ 42.225  

Allowance for Uncollectible Accounts  $ 5.600

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