Problem 8-2A Information related to Mingenback Company for 2015 is summarized be
ID: 2551631 • Letter: P
Question
Problem 8-2A Information related to Mingenback Company for 2015 is summarized below. Total credit sales Accounts receivable at December 31 Bad debts written off $2,424,000 887,000 33,500 (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 Minge back Company estimates its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Mingenback record if it has a Allowance for Doubtful Accounts credit balance of $4,200? Assume that Mingenback Company estimates its bad debt expense based on 6% of accounts receivable, what amount of bad debt expense will ingenback ecord It has an Allowance fo Doubt I Accounts of $3,100?$ Assume that of $3,1002 $ edit balan (d ingenback Company estimates its bad debt expense based on 6% of accounts eceivable what amount of bad debt expense ill inge oack eco it as an A wance or Doubtu Accounts debit lanceExplanation / Answer
A
Actual bad bebts for the year
$33,500
B
Estimate of the bad debts = $2,424,000 x 3%
$72,720
Bad debts to be recognised= $72,720
C
Estimate of bad debt $887,000 x 6% = $52,500 Less Allowance 3,100
$50,120
Bad debts to be recognised= $50,120
D
Estimate of bad debt $887,000 x 6% = $52,500 Plus Allowance debit balance 3,100
$56,320
Bad debts to be recognised= $56,320
A
Actual bad bebts for the year
$33,500
B
Estimate of the bad debts = $2,424,000 x 3%
$72,720
Bad debts to be recognised= $72,720
C
Estimate of bad debt $887,000 x 6% = $52,500 Less Allowance 3,100
$50,120
Bad debts to be recognised= $50,120
D
Estimate of bad debt $887,000 x 6% = $52,500 Plus Allowance debit balance 3,100
$56,320
Bad debts to be recognised= $56,320