Arlington Cycle Company began operations on January 1, 2017. The company reported the following selected items in
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Arlington estimates bad debts at 2 percent of gross sales.
Analyze the activity in the allowance for doubtful accounts T-account, and comment on whether the bad debt estimate has been sufficient to cover the write-offs.
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2018 2017 Gross sales Accounts receivable $1,400,000 $1,500,000 650,000 600,000 Actual bad debt write-offs 22,000 10,000
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