A recent annual report for Target contained the following information (dollars in thousands) at the end of its fiscal year:
|
|
Year 2 |
|
|
|
Year 1 |
|
| Accounts receivable |
$ |
9,085,000 |
|
|
$ |
8,632,000 |
|
| Allowance for doubtful accounts |
|
(1,018,000 |
) |
|
|
(569,000 |
) |
|
|
|
|
|
|
|
|
|
$ |
8,067,000 |
|
|
$ |
8,063,000 |
|
|
A footnote to the financial statements disclosed that uncollectible accounts amounting to $828,000 and $419,000 were written off as bad debts during year 2 and year 1, respectively. Assume that the tax rate for Target was 40 percent.
Required:
Determine the bad debt expense for year 2 based on the preceding facts.