At year-end, chief company has a balance of $10,000 in accounts receivable, of which $9,000 is within 30 days and $1,000 is over 30 days. using the aging of accounts receivable method, chief estimates that 1% of accounts within 30 days and 10% of accounts over thirty days are uncollectible. chief has a credit balance of $100 in the allowance for doubtful accounts before any year-end adjustments. what is the amount of bad debt expense?

Bad debt expense$ 90

Explanation:

The initial account balance was

Accounts Receivable$ 10,000  

Allowance for Uncollectible Accounts  $ 100

The aging of accounts receivable method indicates that the Allowance for Uncollectible Accountsmust have a $190 balance.

Acc. Rec  Allow.  

$ 9,000  $ 901%1-30 days

$ 1,000    $ 10010%more than 30 days

$ 10,000  $ 190  

The journal entry adjustment add up to the balance of Allowance for Uncollectible Accounts to complete the $190 indicated by the aging of accounts receivable method.

Bad debt expense$ 90  

Allowance for Uncollectible Accounts  $ 90

Final Balance  

Accounts Receivable$ 10,000  

Allowance for Uncollectible Accounts  $ 190

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.

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