Option B

Option A

Option C

Option D

$1,430.

$528.

$432.

$660.

Before recording bad debt expense for the year, WOW Enterprises had the following account balances as of December 31, 20x2 Accounts receivable Allowance for uncollectible accounts (credit balance) Credit sales for 20x2 $1,400,000 22,000 1,950,000 WOW Enterprises is considering the following approaches for estimating bad debts for 20x2: Based on 3% of credit sales . Based on 6% of year-end accounts receivable What amount should WOW Enterprises record as bad debt expense at December 31, 20x2 under each method? a. b. Percentage of credit sales $ 36,500 $ 58,500 $ 58,500 $117,000 Percentage of accounts receivable $62,000 $62,000 $ 84,000 $95,000 C. d. Goosen Company began business in 20x2 and has elected a December 31st year end. The following pretax information is avaialable for Goosen Company as of December 31, 20x2: Net sales Cost of goods available for sale Operating expenses Effective tax rate Ending inventories: If LIFO is elected If FIFO is elected 2,800 2,490 770 20% 1,000 1,120 Calculate Goosen's after tax net income assuming it elects to use the FIFO method of accounting for its inventories. Before recording bad debt expense for the year, WOW Enterprises had the following account balances as of December 31, 20x2 Accounts receivable Allowance for uncollectible accounts (credit balance) Credit sales for 20x2 $1,400,000 22,000 1,950,000 WOW Enterprises is considering the following approaches for estimating bad debts for 20x2: Based on 3% of credit sales . Based on 6% of year-end accounts receivable What amount should WOW Enterprises record as bad debt expense at December 31, 20x2 under each method? a. b. Percentage of credit sales $ 36,500 $ 58,500 $ 58,500 $117,000 Percentage of accounts receivable $62,000 $62,000 $ 84,000 $95,000 C. d. Goosen Company began business in 20x2 and has elected a December 31st year end. The following pretax information is avaialable for Goosen Company as of December 31, 20x2: Net sales Cost of goods available for sale Operating expenses Effective tax rate Ending inventories: If LIFO is elected If FIFO is elected 2,800 2,490 770 20% 1,000 1,120 Calculate Goosen's after tax net income assuming it elects to use the FIFO method of accounting for its inventories