A local phone company had a customer who rang up $300 in charges during September 2016, but
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A local phone company had a customer who rang up $300 in charges during September 2016, but did not pay. Despite reminding the customer of this balance, the company was unable to collect in October, November, or December. In March 2017, the company finally gave up and wrote off the account balance. What amount of Sales, Bad Debt Expense, and Net Income would the phone company report from these events in 2016 and 2017 if it used the allowance method of accounting for uncollectable accounts? Assume that the company estimates 5 percent of credit sales will go bad.
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Using the allowance method the company would report 300 of revenue and 15 of Bad Debt Expense in ...View the full answer
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-1259269868
5th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh
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