Problem: Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of accounts receivable would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. The amount of bad debt expense that should be included in Rosco's income statement for the year is  a. $5,000. b. $5,400. c. $4,600. d. $0.

🤓 Based on our data, we think this question is relevant for Professor Guithues-Amrhein's class at SLU.

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Problem Details

Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of accounts receivable would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. The amount of bad debt expense that should be included in Rosco's income statement for the year is 

a. $5,000.

b. $5,400.

c. $4,600.

d. $0.

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Based on our data, we think this problem is relevant for Professor Guithues-Amrhein's class at SLU.