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The Dubious Company operates in an industry where all sales are made of account. The of 1.70% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Year 2 $ 392,000 Unknown 338,000 Year 3 $ 391,000 Unknown 337,750 Unknown Unknown Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 386,000 Unknown 332,000 Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% o sales. b. Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario.

The Dubious Company operates in an industry where all sales are made of account. The of 1.70% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Year 2 $ 392,000 Unknown 338,000 Year 3 $ 391,000 Unknown 337,750 Unknown Unknown Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 386,000 Unknown 332,000 Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% o sales. b. Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario.

FINANCIAL ACCOUNTING
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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Required A Required B Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Bad Debt Expense Net Income Year 1 Year 2 Year 3
Transcribed Image Text:Required A Required B Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Bad Debt Expense Net Income Year 1 Year 2 Year 3
The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.70% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Year 2 $ 392,000 Unknown 338,000 Unknown Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 386,000 Unknown 332,000 Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% of sales. b. Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Required A Required B Complete this question by entering your answers in the tabs below. Bad Debt Expense Net Income Year 3 $ 391,000 Unknown 337,750 Unknown Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% of sales. Year 1 Year 2 Year 3
Transcribed Image Text:The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.70% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Year 2 $ 392,000 Unknown 338,000 Unknown Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 386,000 Unknown 332,000 Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% of sales. b. Assume that the company changes its estimate of uncollectible credit sales to 1.70% in Year 1, 2.70% in Year 2 and 2.20% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Required A Required B Complete this question by entering your answers in the tabs below. Bad Debt Expense Net Income Year 3 $ 391,000 Unknown 337,750 Unknown Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.70% of sales. Year 1 Year 2 Year 3
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