Bradford Plumbing had the following data for a recent year:
Credit Sales $289,000
Allowance for doubtful accounts, 1/1 (a credit balance) $4,120
Accounts Receivable 1/1 $38,700
Collects on Account Receivable $291,000
Accounts Receivable Written Off $4,620
Bradford estimates that 2.2 percent of credit sales will eventually default.
1. Compute bad debt expense for the year.
2. Determine the ending balances in accounts receivable and allowance for doubtful accounts.