2peace
Mar 30, 2008, 07:16 PM
Hey I am having trouble with this part in my homework where we are to compute bad debt amounts with 3 methods used for uncollectable accounts. I am having trouble on the direct write-off method. In problem A it is asking for the amount of bad debts expense that the company will report using the direct write-off method. Here is the problem:
P9-2C Information related to Bee Company for 2008 is summarized below.
Total credit sales $1,100,000
Accounts receivable at December 31 369,000
Bad debts written off 22,150
Instructions
(a) What amount of bad debts expense will Bee Company report if it uses the direct write-off
method of accounting for bad debts?
(b) Assume that Bee Company decides to estimate its bad debts expense to be 2% of credit
sales. What amount of bad debts expense will Bee record if Allowance for Doubtful
Accounts has a credit balance of $3,000?
(c) Assume that Bee Company decides to estimate its bad debts expense based on 6% of accounts
receivable. What amount of bad debts expense will Bee Company record if
Allowance for Doubtful Accounts has a credit balance of $4,000?
(d) Assume the same facts as in (c), except that there is a $2,000 debit balance in Allowance for
Doubtful Accounts.What amount of bad debts expense will Bee record?
I haven't tried working on the other methods but if you can give me some insight on how to figure them out, I'll also appreciate it.
P9-2C Information related to Bee Company for 2008 is summarized below.
Total credit sales $1,100,000
Accounts receivable at December 31 369,000
Bad debts written off 22,150
Instructions
(a) What amount of bad debts expense will Bee Company report if it uses the direct write-off
method of accounting for bad debts?
(b) Assume that Bee Company decides to estimate its bad debts expense to be 2% of credit
sales. What amount of bad debts expense will Bee record if Allowance for Doubtful
Accounts has a credit balance of $3,000?
(c) Assume that Bee Company decides to estimate its bad debts expense based on 6% of accounts
receivable. What amount of bad debts expense will Bee Company record if
Allowance for Doubtful Accounts has a credit balance of $4,000?
(d) Assume the same facts as in (c), except that there is a $2,000 debit balance in Allowance for
Doubtful Accounts.What amount of bad debts expense will Bee record?
I haven't tried working on the other methods but if you can give me some insight on how to figure them out, I'll also appreciate it.