Question

A company has a credit balance of $ 700 in its allowance for doubtful accounts.
The amount of credit sales for the period is $ 80,000, and the balance in accounts receivable is $ 15,000. Assume that the bad debt estimates are as follows:
(a) Related to accounts receivable, 8% composite rate, or
(b) Related to credit sales, 0.4%. What would be the balance of the allowance for doubtful accounts and the bad debt expense, if
(a) The aging method were used (composite rate) and
(b) The credit sales method were used?



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  • CreatedFebruary 17, 2015
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