P9-2A_P9-5A C-Wyckoff.docx

P9-2A_P9-5A C-Wyckoff.docx - P9-2A P9-5A Charles Wyckof...

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P9-2A & P9-5A 10/4/2017 Charles Wyckof P9-2A Information related to Mingenback Company for 2017 is summarized below. Total credit sales $2,500,000 Accounts receivable at December 31 875,000 Bad debts written off 33,000 Instructions (a) What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for bad debts? The $33,000 (b) Assume that Mingenback Company estimates its bad debt expense to be 2% of credit sales. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $4,000? $2,500,000 X 2% is $50,000 (c) Assume that Mingenback Company estimates its bad debt expense based on 6% of accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $3,000? 875,000 X 6% is 52,500, less 3,000 is $49,500 (d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Mingenback record?
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