1. Easy Company sells directly to retail customers. On January 1, 2020, the balance of the accounts receivable was P2,070,000 while the allowance for doubtful accounts was a credit of P78,(XX). The following data are gathered. Credit Sales 11,100,000 12,250,000 Writeolfs Recoveries 2017 22,000 260,000 295,(00) 2018 37,000 2019 14,650,000 15,000,000 300,000 36,000 2020 310,000 42,000 Doubiful accounts are provided for as a percentage of credit sales. The entity caleulated the percentage annually by using the experience of the three years prior to the current year. Required: a. What is the percentage of credit sales to be used in computing doubtful accounts expense for 2020? b. What amount should be reported as doubiful expense for 2020? c. What amount should be reported as allowance for doubtful accounts on December 31, 2020?

1. Easy Company sells directly to retail customers. On January 1, 2020, the balance of the accounts receivable was P2,070,000 while the allowance for doubtful accounts was a credit of P78,(XX). The following data are gathered. Credit Sales 11,100,000 12,250,000 Writeolfs Recoveries 2017 22,000 260,000 295,(00) 2018 37,000 2019 14,650,000 15,000,000 300,000 36,000 2020 310,000 42,000 Doubiful accounts are provided for as a percentage of credit sales. The entity caleulated the percentage annually by using the experience of the three years prior to the current year. Required: a. What is the percentage of credit sales to be used in computing doubtful accounts expense for 2020? b. What amount should be reported as doubiful expense for 2020? c. What amount should be reported as allowance for doubtful accounts on December 31, 2020?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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