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Unformatted text preview: adjustment at the end of 20x5. Actual write-offs of accounts receivable were as follows: 20x5 $260 20x6 580 20x7 815 20x8 893 Required : a. Determine the bad debt expense for each of the four years assuming first that the company bases its addition to the allowance for doubtful accounts on credit sales and alternatively on a schedule of aged accounts receivable. b. Compare total bad debt expense over the combined four-year period under each of the two methods. Which method results in the more erratic pattern of bad debt expense in this particular example? Why? % of Sales Method Acc'ts. Receivable A.D.A. Bad Debt Expense open bal.-0-Aged Accounts Receivable Method Acc'ts. Receivable A.D.A. Bad Debt Expense open bal.-0-...
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This note was uploaded on 05/06/2010 for the course COMM Comm 353 taught by Professor Zhang during the Spring '09 term at The University of British Columbia.
- Spring '09