The records of Bramble Company at the end of the current year show Accounts Receivable $95,400, Credit Sales $1,004,400, and Sales Returns and Allowances $49,600. (a) If Bramble uses the direct write-off method to account for uncollectible accounts and Bramble determines that Matisse's $1,116 balance is uncollectible, what will Bramble record as bad debt expense? Bad debt expense $ (b) Assume Bramble uses the allowance method to account for uncollectible accounts. If Allowance for Doubtful Accounts has a balance of $1,364 and Bramble concludes bad debts are expected to be 10% of accounts receivable, what will Bramble record as bad debt expense? Bad debt expense $
The records of Bramble Company at the end of the current year show Accounts Receivable $95,400, Credit Sales $1,004,400, and Sales Returns and Allowances $49,600. (a) If Bramble uses the direct write-off method to account for uncollectible accounts and Bramble determines that Matisse's $1,116 balance is uncollectible, what will Bramble record as bad debt expense? Bad debt expense $ (b) Assume Bramble uses the allowance method to account for uncollectible accounts. If Allowance for Doubtful Accounts has a balance of $1,364 and Bramble concludes bad debts are expected to be 10% of accounts receivable, what will Bramble record as bad debt expense? Bad debt expense $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:The records of Bramble Company at the end of the current year show Accounts Receivable $95,400, Credit Sales $1,004,400, and
Sales Returns and Allowances $49,600.
(a)
If Bramble uses the direct write-off method to account for uncollectible accounts and Bramble determines that Matisse's
$1,116 balance is uncollectible, what will Bramble record as bad debt expense?
Bad debt expense
$
(b)
Assume Bramble uses the allowance method to account for uncollectible accounts. If Allowance for Doubtful Accounts has a
balance of $1,364 and Bramble concludes bad debts are expected to be 10% of accounts receivable, what will Bramble
record as bad debt expense?
Bad debt expense
$
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