Answer:
The bad debt expense amount to $4,400
Explanation:
Bad debt expense is the expense which is not recovered by the business in the future.
The amount of bad debt expense would be computed as:
Bad debt expense = 1% of Accounts receivable + Debit balance of allowance for doubtful accounts
where
Accounts receivable is $400,000
Debit balance of allowance for doubtful accounts is $400
Putting the values above:
Bad debt expense = $400,000 × 1% + $400
= $4,000 + $400
= $4,400
