Jacobian Steel Manufacturing sells bulk steel products for maritime construction

Question

Jacobian Steel Manufacturing sells bulk steel products for maritime construction. The company has used the allowance method for estimated bad debts for several years. Specifically, they estimate that 6% of credit sales will go bad each year. Over the past several years, Jacobian has seen that year-end allowance account has a debit balance before adjustment. The company wants an in-depth analysis of bad debts and a determination as to which method to use. You have been hired to perform the study. During your review of their financial records, the following data becomes available.

Explanation / Answer

2003 2004 2005 Sales 1000000 1800000 2000000 Credit Sales 600000 1260000 1500000 Bad debts 52000 96000 60000 Please consider the time devoted to make this reply by rating this as 5 star. Thank u in advance. God bless u :)

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