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What amount of bad debts expense will the company record

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Reference no: EM132808744

Double Trouble Company has the following information for its operations for the current year

Double Trouble Company :

Total sales for the year $ 3,750,000

Sales on credit 80% of total sales S

ales discounts taken on all credit sales Terms 1/15, n/30

Bad debts written off during the year $ 60,000

Accounts receivable balance at the end of the year $ 500,000

REQUIRED:

A. Assume that Double Trouble estimates its bad debts expense for the year at 2% of net credit sales:

Problem 1. What amount of bad debts expense will the company record if it has an unadjusted credit balance of $5,000 in its Allowance for Doubtful Accounts account at December 31?

Problem 2. What amount of bad debts expense will the company record if it has an unadjusted debit balance of $5,000 in its Allowance for Doubtful Accounts account at December 31?

Reference no: EM132808744

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