The Allowance for Doubtful Accounts has a credit balance of $9500 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of- receivables method, the company's management estimates that uncollectible accounts will be $17,000. What will be the amount of Bad Debts Expense reported on the income statement?

To calculate the amount of **Bad Debts Expense** reported on the income statement, we use the following formula:

\[
\text{Bad Debts Expense} = \text{Estimated Uncollectible Accounts} - \text{Allowance for Doubtful Accounts (Credit Balance)}
\]

Given:
- Allowance for Doubtful Accounts (credit balance) = $9,500
- Estimated Uncollectible Accounts (from aging method) = $17,000

Now, applying the formula:

\[
\text{Bad Debts Expense} = 17,000 - 9,500 = 7,500
\]

So, the **Bad Debts Expense** reported on the income statement will be **$7,500**.

Would you like any further details or explanations?

### Related Questions:
1. How is the aging-of-receivables method used to estimate uncollectible accounts?
2. What impact does bad debts expense have on the financial statements?
3. How would the entry for bad debts expense affect the Allowance for Doubtful Accounts?
4. What is the difference between direct write-off and allowance methods for bad debts?
5. How do changes in credit policies impact bad debts expense?

### Tip:
Remember, the Allowance for Doubtful Accounts is a contra-asset account that reduces Accounts Receivable to its net realizable value on the balance sheet.

The Allowance for Doubtful Accounts has a credit balance of $9500 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $17,000. What will be the amount of Bad Debts Expense reported on the income statement?

Learn how to calculate Bad Debts Expense using the aging-of-receivables method. This accounting problem involves determining the Bad Debts Expense when the Allowance for Doubtful Accounts has a credit balance of $9,500 and uncollectible accounts are estimated to be $17,000.

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