Information related to Jordan Schlansky

Information related to Jordan Schlansky

Company for 2012 is summarized below.
Total credit sales $2,200,000
Accounts receivable at December 31 825,000
Bad debts written off 33,000
Instructions
(a) What amount of bad debts expense will Jordan Schlansky Company report if it uses the direct write-off method of accounting for bad debts?
(b) Assume that Jordan Schlansky Company estimates its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Jordan Schlansky record if it has an Allowance for Doubtful Accounts credit balance of $4,000?

Information related to Jordan Schlansky

(c) Assume that Jordan Schlansky Company estimates its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Jordan Schlansky record if it has an Allowance for Doubtful Accounts credit balance of $3,000?
(d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debts expense will Jordan Schlansky record?
(e) What is the weakness of the direct write-off method of reporting bad debts expense?

Is this the question you were looking for? If so, place your order here to get started!