At the End of Its First Year of Operations, December

question 17

Essay

At the end of its first year of operations, December 31, 2019, Felicity Ltd.'s accounts show the following amounts:
$\begin{array}{|l|lrr|} \hline\text { Accounts receivable } &\$1,845,000 \\\hline \text { Allowance for doubtful accounts, before any adjusting or dosing } &\\ \text { entries } &11,000 \text {Cr }\\\hline \text { Bad debt expense for 2019 prior to any adjusting or closing } &\\ \text {entries } &48,000 \text {Dr }\\\hline \text { Customer accounts written off as uncollectable during 2019 } &37,000\\\hline \end{array}$
The company estimates that the following amounts of accounts receivable will not be collectible:
$$\begin{array} { | l | c | c | c | c | c | } \hline \text { Days outstanding } & \mathbf { 0 } - \mathbf { 3 0 } & \mathbf { 3 1 } - \mathbf { 7 5 } & \mathbf { 7 6 } - \mathbf { 1 2 0 } & \mathbf { 1 2 0 } + & \text { Total } \\\hline \text { Amount } & 510,000 & 444,000 & 403,000 & 128,000 & 1,485,000 \\\hline \% \text { not collectible } & 5 \% & 9 \% & 15 \% & 28 \% & \ldots \\\hline\end{array}$$ What should be the amount of bad debt expense for the year ended December 31, 2019?

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Definitions:

Stress-Inducing Event

An occurrence that triggers a physical or emotional strain or tension.

Arnold Lazarus

An influential psychologist known for developing multimodal therapy, which addresses seven interconnected facets of personality.

Susan Folkman

Susan Folkman is a psychologist known for her research on stress, coping mechanisms, and psychological resilience.

Problem-Focused Coping

A strategy for dealing with stress by directly addressing the problem causing the stress, seeking practical solutions.