Problem 8-4B Here is information related to Blossom Company for 2014. (a) What a

Question

Problem 8-4B

Here is information related to Blossom Company for 2014.

(a) What amount of bad debt expense will Blossom Company report if it uses the direct write-off method of accounting for bad debts?

(b) Assume that Blossom Company decides to estimate its bad debt expense based on 4% of accounts receivable. What amount of bad debt expense will the company record if it has an Allowance for Doubtful Accounts credit balance of $3,000?

(c) Assume the same facts as in (b), except that there is a $1,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Blossom Company record?

Explanation / Answer

a) Bad debts expense 37,300 b) Bad debts expense 25,920 (723000*4% -3000) c) Bad debts expense 29,920 (723000*4% +1000)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects