Here is information related to Freeman Company for 2014. What amount of bad debt
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Here is information related to Freeman Company for 2014. What amount of bad debt expense will Freeman Company report if it uses the direct write off method of accounting for bad debts? Assume that Freeman Company decides to estimate its bad debt expense based on 4% o accounts receivable. What amount of bad debt expense will the company record if Allowa for Doubtful Accounts has a credit balance of $4,700? Assume the same facts as in part (b), except that there Is a $2,900 debit balance In Allowance for Doubtful Accounts. What amount of bad debt expense will Freeman record?Explanation / Answer
Freeman Company Details Amt $ Total credit sales 1,632,000 Accounts receivable on 31 Dec 2014 816,000 Bad debt written off 51,400 1 Amount of bad debt expense Freeman will report for direct write off of bad debts $ 51,400.00 Considering each situation is independednt and has no link with other situation Details Amt $ 2 Estimated Bad debt allowance required for 4% of AR 32,640 Allowance for Doubful accounts credit balance 4,700 Additional provision for Allowance for doubtful debts required 27,940 Bad debt expense $ 27,940 3 Details Amt $ Estimated Bad debt allowance required for 4% of AR 32,640 Allowance for Doubful accounts debit balance 2,900 Additional provision for Allowance for doubtful debts required 35,540 Bad debt expense $ 35,540
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