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A Bad Debt Calculator is designed to help businesses estimate the amount of receivables that will not be collected. By inputting the total accounts receivable and the estimated percentage of uncollectible accounts, this calculator provides a clear estimate of potential bad debt. This information is essential for accurate financial forecasting and for making informed business decisions.

## Formula of Bad Debt Calculator

To calculate bad debt, use the following detailed formula:

Bad Debt = Accounts Receivable * Percentage of Uncollectible Accounts

Detailed Formula:

Bad Debt (BD) = Accounts Receivable (AR) * Percentage of Uncollectible Accounts (PUA)

Where:

• Bad Debt (BD) is the estimated amount of receivables that are expect to be uncollectible.
• Accounts Receivable (AR) is the total amount of money owed by customers.
• Percentage of Uncollectible Accounts (PUA) is the estimated percentage of accounts receivable that will not be collected.

## General Terms and Table

For ease of reference, here is a table of common terms and their conversions related to bad debt:

## Example of Bad Debt Calculator

Let’s consider a business with \$100,000 in accounts receivable and an estimated uncollectible accounts percentage of 5%. To find the bad debt:

1. Identify the total accounts receivable: \$100,000
2. Determine the percentage of uncollectible accounts: 5% or 0.05
3. Apply the formula:

Bad Debt (BD) = \$100,000 * 0.05