a)
Category | Amount (a) | % of un-collectible (b) | Allowance for doubtful account at year end (a*b) |
Not past due | 140000 | 2% | 2800 |
1-45 days | 30000 | 6% | 1800 |
Beyond 45 days | 10000 | 25% | 2500 |
180000 | |||
Total | 7100 |
b)
Allowance for doubtful debt at year end = Balance before any adjustments- write off + Bad debt expense
7100 = 2400 - 4000+ Bad debt expense
7100 = -1600 + Bad debt expense
Bad debt expense = 7100 +1600
= 8700
Net income will decrease by 8700 due to bad debt expense
c)
Accounts receivable ,Gross | 180000 |
Less:Allowance for doubtful account | -7100 |
Accounts receivable ,net | 172900 |
$2.400 before write-offs and of 2017, the allowance for doubt adjustments. Morse evaluates its receivable. Morse...
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