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Bad Debt Expense Allowance for Doubtful Accounts Debit Balance

FINACT-EKFI4W

Jazz Company has a \$200 debit balance at 12/31/17 in the Allowance for Doubtful Accounts before year-end adjusting entries have been made. After analyzing the Accounts Receivable account, it has been determined that two customers have account balances that will more than likely be uncollectable because they are more than 180 days past due. Smith and Associates owes Jazz Company \$2,000 on an invoice dated 5/31/17, and Brown Corporation owes \$1,800 related to an invoice dated 1/20/17.

How much Bad Debt Expense will need to be recorded in an adjusting entry at year-end if Jazz Company uses the Balance Sheet method to estimate Bad Debt Expense?

A

\$3,600

B

\$3,800

C

\$3,400

D

\$4,000