The Allowance for Bad Debts has a credit balance of $8000 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 $15,000. What will be the amount of Bad Debts Expense reported on the income statement?
A) $23,000
B) $7000
C) $15,000
D) $8000
B) $7000
Explanation: Estimate of uncollectible accounts - Credit balance of the Allowance for Bad Debts = $15,000 - $8000 = $7000
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