P7-2 solution - PROBLEM 7-2 1 Net sales Percentage Bad debt expense $1,200,000 1 1\/2 $ 18,000 2 Accounts receivable Amounts estimated to be

P7-2 solution - PROBLEM 7-2 1 Net sales Percentage Bad debt...

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PROBLEM 7-2 1. Net sales ................................................................................................................ $1,200,000 Percentage ............................................................................................................. 1 1/2% Bad debt expense ................................................................................................... $ 18,000 2. Accounts receivable .............................................................................................. $1,750,000 Amounts estimated to be uncollectible ................................................................. (180,000 ) Net realizable value ............................................................................................... $1,570,000 3. Allowance for doubtful accounts 1/1/14 ............................................................... $ 17,000 Establishment of accounts written off in prior years ............................................. 8,000 Customer accounts written off in 2014 ................................................................. (30,000) Bad debt expense for 2014 ($2,400,000 X 3%) .................................................... 72,000 Allowance for doubtful accounts 12/31/14 ........................................................... $ 67,000 4. Bad debt expense for 2014 ....................................................................................
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  • Fall '08
  • ABOHABIB
  • ........., Generally Accepted Accounting Principles

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