On December 31, 2021, Andy Inc. has a debit balance of $1,500 for the Allowance for Uncollectible Accounts before any year-end adjustment. Andy Inc. also has the following information for its accounts receivable and the estimated percentages of bad debts for different past-due amounts:
Age Group
(days past due) Accounts
Receivable Estimated Percent Uncollectible
0-30 $ 50,000 5 %
31-60 $ 20,000 10 %
61-90 $ 10,000 20 %
What is the amount of bad debt expense to be reported on Andy Inc.'s financial statements for 2021 using the aging method?
A) $6,500.
B) $1,500.
C) $5,000.
D) $8,000.
Answer: $8,000.
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Accounting
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