solution A - P9-2A (a-d)What amount of bad debts expense...

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Unformatted text preview: P9-2A (a-d)What amount of bad debts expense will Hermesch Company report if it uses the direct writeoff method of accounting for bad debts? $33,000 In this method, the bad debt expenses are debited and accounts receivables are credited.Assume that Hermesch Company estimates its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $4,000? $40,0002% of $2,200,000 is $44,000 and the Allowance for Doubtful Debt has already the balance of $4,000 so the balance of $40,000 needs to be booked as bad debt expenses.Assume that Hermesch Company estimates its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $3,000? $46,5006% of $825,000 is $49,500 and the Allowance for Doubtful Debt has already the balance of $3,000 so the balance of $46,500 needs to be booked as bad debt expenses.Assume the same facts as in the question above, except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debts expense will Hermesch record? Allowance for Doubtful Accounts....
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This note was uploaded on 05/13/2010 for the course MECH 17657 taught by Professor Ravikant during the Spring '10 term at Indian Institute of Technology, Delhi.

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solution A - P9-2A (a-d)What amount of bad debts expense...

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