Information related to Mingenback Company for 2015 is summarized below. A) What
ID: 2460077 • Letter: I
Question
Information related to Mingenback Company for 2015 is summarized below.
A) What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for bad debts? $
B) Assume that Mingenback Company estimates its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $4,100? $
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? $
D) 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 debit balance of $3,000? $
Total credit sales $2,408,000 Accounts receivable at December 31 $905,000 Bad debts written off $32.500Explanation / Answer
a)The bad debt expense it reports is $32,500
b)bad debt expense=3%*2,408,000=$$72,240
c)(7%*905,000)-3000=$$60,350
d)(7%*905,000)+3000=$$66,350