Assume Simple Co. had credit sales of $256,000 and cost of goods sold of $144,000 for the period. Simple uses the percentage of credit sales method and estimates that 0.5 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $305. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment? (Omit the "$" sign in your response.) Bad Debt Expense this year $ Explanation: Credit sales this period $ 256,000 × Bad debt loss rate (0.5%) × 0.005 Bad Debt Expense this year $ 1,280

Assume Simple Co. had credit sales of $256,000 and cost of goods sold of $144,000 for the period. Simple uses the percentage of credit sales method and estimates that 0.5 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $305.

Required:

What amount of Bad Debt Expense would the company record as an end-of-period adjustment? (Omit the "$" sign in your response.)

 

Bad Debt Expense this year

$

Explanation:  

Credit sales this period	$	256,000
× Bad debt loss rate (0.5%)		× 0.005
Bad Debt Expense this year	$	1,280