Can I please get detailed answer for this. I am trying to understand the process

Question

Can I please get detailed answer for this. I am trying to understand the process to get to the answer.

expense al su ule 2010, assuulmng that 7 per cent of accounts receivable at 30 June are uncollectible 19 Comparing methods for uncollectible receivables LO2,3 The following data pertains to the operations of Knight Corporation for 2016: Net credit sales Net income (before bad debt expense) Write-offs of uncollectible accounts Estimated uncollectible percentage of net credit sales $725000 135000 17 500 300

Explanation / Answer

Solution.

.A.

Calculation of baddebt As per direct write off method = $17,500

Calculation of baddebt As per allowancess method = $21,750

B . Profit after bad debt expense.

Direct write off method = $135,000 - $17,500 =$117,500

Allowancess method = $135,000 - $21,750 = $113.250

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