Information related to Hamilton Company for 2014 is summarized below.
Total credit sales ............. $2,500,000
Accounts receivable at December ....... 31 970,000
Bad debts written off ........... 66,000

Instructions
(a) What amount of bad debt expense will Hamilton Company report if it uses the direct write-off method of accounting for bad debts?
(b) Assume that Hamilton Company estimates its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Hamilton record if it has an Allowance for Doubtful Accounts credit balance of $4,000?
(c) Assume that Hamilton Company estimates its bad debt expense based on 7% of accounts receivable. What amount of bad debt expense will Hamilton record if it has an Allowance for Doubtful Accounts credit balance of $3,000?
(d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Hamilton record?
(e) What is the weakness of the direct write-off method of reporting bad debt expense?