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19-12-2022
Business

Answered

Bad Debt Expense: Percentage of Credit Sales Method
Bradford Plumbing had the following data for a recent year:
Credit sales $547,900
Allowance for doubtful accounts, 1/1 (a credit balance) 8,740
Accounts receivable, 1/1 42,340
Collections on account receivable 489,770
Accounts receivable written off 14,250
Bradford estimates that 2% of credit sales will eventually default.
Required:
1. Compute bad debt expense for the year (rounding to the nearest whole number).

2. Determine the ending balances in accounts receivable and allowance for doubtful accounts.
Ending Balance
Accounts receivable
Allowance for doubtful accounts

Answer :

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