Blue Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $ 800. During the year Blue wrote off uncollectible receivables of $ 1 comma 700. Blue recorded Bad Debts Expense of $ 2 comma 600. What is Blue's year-end balance in Allowance for Bad Debts? A. $ 3 comma 400 B. $ 4 comma 300 C. $ 1 comma 700 D. $ 900

c. $1,700

Explanation:

The computation of balance in Allowance for Bad Debts is shown below:-

Beginning Allowance for bad debts = $800

Current period bad debts expenses = $2,600

Written off during the period = $1,700

Allowance for bad debts, at year end = Beginning Allowance for bad debts + Current period bad debts expenses - Written off during the period  

= $800 + $2,600 - $1,700

= $1,700

Therefore for computing the Allowance for bad debts, at year end we simply applied the above formula.

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.

c.

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