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The Bad Debt Expense Calculator is a financial tool designed to estimate the amount of debt that is expected to be uncollectible. This calculation helps businesses account for potential losses from customers who fail to pay their credit obligations. By using this calculator, companies can accurately reflect the financial impact of bad debts on their income statements and plan accordingly.

## Formula of Bad Debt Expense Calculator

To calculate bad debt expense, use the following detailed formula:

Bad Debt Expense = Total Credit Sales * Percentage of Uncollectible Sales

Detailed Formula:

Bad Debt Expense (BDE) = Total Credit Sales (TCS) * Percentage of Uncollectible Sales (PUS)

Where:

• `Bad Debt Expense (BDE)` is the expense recognize for accounts receivable that are expect to be uncollectible.
• `Total Credit Sales (TCS)` is the total amount of sales made on credit.
• `Percentage of Uncollectible Sales (PUS)` is the estimate percentage of credit sales that will not be collect.

## Example of Bad Debt Expense Calculator

Let’s say a company has total credit sales of \$100,000 and estimates that 5% of these sales will be uncollectible.

Using the formula:

Bad Debt Expense = Total Credit Sales * Percentage of Uncollectible Sales
Bad Debt Expense = \$100,000 * 0.05 = \$5,000

In this example, the bad debt expense is \$5,000, meaning the company should account for this amount as an expense due to expected uncollectible accounts.