I need help with this question to make an explanation for accounting. E7.1o (LO 3) (Bad-Debt Reporting Tihe Chiefaccountant for Dickinson Corporation Provides You withthe following list of accounts receiv. written off in the CurrentYear.DateMarch 3I(ustomerE.L. Masters CompanyStephen Crane ASSOCiatesAmount$7,8000l/06,700June30yooD8830September 30Amy Lowell's Dress ShopDecember 31R.Frost, IncDickinson follows the Policy of debiting Bad Debt Expense asaccounts are written offe The Chief accountant maintains that thisProcedure is appropriate for tinancial statement Purposes becausethe Internal Revenue servicce will not acept other methods forrecognizing bad debts.All of Dickinson's sales are on a 30-day credit basis.Sales for the Current year total $2,20g000.The bulance in Accounts Receiv at Year-end is $7,00and an anglysis of Customer risk and Charge-off experience indicatesthat I2% of receivables will be uncollectible Cassume a zero balancein the allowance).Instructions:Do You agree or disagree with Dickinson's Policy Concerningrecognition of bad debt expense?Why or Why not?BY What amount would net income differ if bad debt expensewas computed using the Percentage-of-receivables gperoach?B.

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E1.1o (LO3) (Bad-Debt Reforting The Chief accountant for Dickinson Corporation Provides You with the following ist of accounts receiv. written otf in the Current Year (ustomer E.L. Masters Company stephen Crane AsSOciates Amy Lowell's Dress Shop R.Frost Inc Amount $7,800 6,700 Date March 31 June30 September 30 yooD 9830 December 31 Dickinson follows the Policy of debiting Bad Debt EXPense as accounts are written offi The Chief accountant maintains that this Procedure is appropriate for tinancial Statement PurPoses becquse the Internal Revenue service will not gccept other methods for recognizing bad debts. All of Dickinson's sales are on a 30-day (redit basis. Sales for the Current year total $320g000. The bulance in Accounts Receiv. at Year-end is $7,00 and an analysis of Customer risk and Charge-off experience indicates that 12% of receivables will be uncollectible (assume a zero balance in the allowance). Instructions: Do You agree or disagree with Dickinson's Policy Concerning recognition of bud debt exeense? Why or Why not? BY What amount would net income differ if bad debt expense was Computed using the Percentage-of-receivalbles geeroach? B.

E1.1o (LO3) (Bad-Debt Reforting The Chief accountant for Dickinson Corporation Provides You with the following ist of accounts receiv. written otf in the Current Year (ustomer E.L. Masters Company stephen Crane AsSOciates Amy Lowell's Dress Shop R.Frost Inc Amount $7,800 6,700 Date March 31 June30 September 30 yooD 9830 December 31 Dickinson follows the Policy of debiting Bad Debt EXPense as accounts are written offi The Chief accountant maintains that this Procedure is appropriate for tinancial Statement PurPoses becquse the Internal Revenue service will not gccept other methods for recognizing bad debts. All of Dickinson's sales are on a 30-day (redit basis. Sales for the Current year total $320g000. The bulance in Accounts Receiv. at Year-end is $7,00 and an analysis of Customer risk and Charge-off experience indicates that 12% of receivables will be uncollectible (assume a zero balance in the allowance). Instructions: Do You agree or disagree with Dickinson's Policy Concerning recognition of bud debt exeense? Why or Why not? BY What amount would net income differ if bad debt expense was Computed using the Percentage-of-receivalbles geeroach? B.

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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