**Question:**Crane Inc. has evaluated its process of calculating estimates of uncollectible accounts receivable. In the past, Crane calculated the Bad Debt Expense as a percentage of sales. It recorded Bad Debt Expense at 1% of sales. Due to changes in the economic conditions, Crane will increase that percentage to 3%. The change is made on January 1, 2025. Sales in 2023 were $16,300,000 and $31,300,000 in 2024. Sales in 2025 total $41,300,000. What is the Bad Debt Expense that Crane will record for 2025?**Options:**- $159,100- $217,800- $413,000- $123,900**Explanation:**To calculate the Bad Debt Expense for 2025, multiply the sales for 2025 by the new percentage of 3%:\[ \text{Bad Debt Expense} = \text{Sales in 2025} \times \text{Percentage} \]\[ \text{Bad Debt Expense} = \$41,300,000 \times 0.03 \]\[ \text{Bad Debt Expense} = \$1,239,000 \]Thus, the correct option is **$1,239,000** (However, considering the options provided, it appears there may be a typographical error, and none of the given choices are correct based on this calculation).

The bad debt expense represents the amount that is uncollectible during the current period. The bad…

Current Attempt in Progress * Your answer is incorrect. Crane Inc. has evaluated its process of calculating estimates of uncollectible accounts receivable. In the past. Crane calculated the Bad Debt Expense as a percentage of sales. It recorded Bad Debt Expense at 1% of sales. Due to changes in the economic conditions, Crane will increase that percentage to 3%. The change is made on January 1, 2025. Sales in 2023 were $1630000 and $3130000 in 2024. Sales in 2025 total $4130000. What is the Bad Debt Expense that Crane will record for 2025? O $159100 $217800 O $41300 O $123900

Current Attempt in Progress * Your answer is incorrect. Crane Inc. has evaluated its process of calculating estimates of uncollectible accounts receivable. In the past. Crane calculated the Bad Debt Expense as a percentage of sales. It recorded Bad Debt Expense at 1% of sales. Due to changes in the economic conditions, Crane will increase that percentage to 3%. The change is made on January 1, 2025. Sales in 2023 were $1630000 and $3130000 in 2024. Sales in 2025 total $4130000. What is the Bad Debt Expense that Crane will record for 2025? O $159100 $217800 O $41300 O $123900

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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