Homework Answers
1) Ending Accounts receivable = Beginning Accounts receivable + Sales - Cash collections
= $100,000 + $500,000 - $400,000
= $200,000
2) Ending ADA = Ending Accounts receivable balance * 5%
= $200,000 * 5%
= $10,000
3) Bad debt expense = Ending ADA + Accounts receivable written off - Beginning ADA
= $10,000 + $15,000 - $10,000
= $15,000
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