A company’s year-end balance in accounts receivable is $2,000,000. The allowance for uncollectible accounts had a beginning-of-year credit balance of $30,000. An aging of accounts receivable at the end of the year indicates a required allowance of $38,000. If bad debt expense for the year was $40,000, what was the amount of bad debts written off during the year?
Bad debt written off = Allowance for uncollectible accounts beginning-of-year credit balance + Bad debt expense - Allowance for uncollectible accounts end-of-year
