Bad Debt Expense Calculator

Formula

To calculate the bad debt expense (BDE):

\[ \text{BDE} = \text{S} \times \left(\frac{\text{BD}}{100}\right) \]

Where:

$\text{BDE}$ is the bad debt expense ($)
$\text{S}$ is the total sales for the accounting period ($)
$\text{BD}$ is the percentage of total sales uncollectable (%) (bad debt)

What is Bad Debt Expense?

A bad debt expense is defined as the total percentage of debt or outstanding credit that is uncollectable. It represents the amount of receivables that a company does not expect to collect and is recorded as an expense on the income statement.

Example Calculation 1

Let's assume the following values:

Total Sales ($\text{S}$) = $100,000
Bad Debt Percentage ($\text{BD}$) = 5%

Using the formula:

\[ \text{BDE} = 100000 \times \left(\frac{5}{100}\right) = 100000 \times 0.05 = 5000 \]

The Bad Debt Expense is $5,000.

Example Calculation 2

Let's assume the following values:

Total Sales ($\text{S}$) = $200,000
Bad Debt Percentage ($\text{BD}$) = 3%

Using the formula:

\[ \text{BDE} = 200000 \times \left(\frac{3}{100}\right) = 200000 \times 0.03 = 6000 \]

The Bad Debt Expense is $6,000.