Assume Simple Company had credit sales of $255,000 and cost of goods sold of $155,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $300. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment?

Assume Simple Company had credit sales of $255,000 and cost of goods sold of $155,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $300. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment?

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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