Information related to Mingenback Company for 2015 is summarized below. A) What
ID: 2460207 • 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. Amount of bad debt expense as per direct write off method is $32.500
Journal entry will be Bad debt A/c Dr.
To Account Receivable Cr.
B. Allowance for doubtful debt - 3% of credit sales =
Already in account $4100
So Amount to record is
C.
$51,300
D.
$72,240