As at December 31, 2020, Superior Software Inc. had a total of $2,800,000 recorded as owed by credit sale customers. Of this, $380,000

was owed by a customer who ran away and is unlikely to pay his debt. In respect of the balance, the company has decided to introduce (for the first time) a provision for doubtful accounts of 5% of the amount owed.

Required

1. (a) What is the bad debt expense for year 2020?
2. (b) How would the accounts receivable appear on the balance sheet as at December 31, 2020?
3. (c) If sales revenue for 2020 was $13,200,000, calculate the receivables turnover ratio.

(d) If sales revenue for 2020 was $13,200,000, calculate the receivables collection period.

Answer rating: 100% (QA)

a To calculate the bad debt expense for the year 2020 we need to consider the amount owed by the cus... View the full answer