Chapter 8, Problem 8.2CTDC

1.

To determine

Concept Introduction:

Direct write-off method: Uncollectible are written off and bad debt expenses are recorded when the business determines that it may not be able to collect from a specific customer. Sometimes after the write-off, bad debt is recovered. The company must reverse the earlier write-off.

The effect on net income for 2024 when PP applies the allowance method for bad debts and uses a percentage of sale method to estimate bad debts.

2.

To determine

Concept Introduction:

Direct write-off method: Uncollectible are written off and bad debt expenses are recorded when the business determines that it may not be able to collect from a specific customer. Sometimes after the write-off, bad debt is recovered. The company must reverse the earlier write-off.

The amount of receivable balance PP is expected to collect at the end of 2024.

3.

To determine

Concept Introduction:

Direct write-off method: Uncollectible are written off and bad debt expenses are recorded when the business determines that it may not be able to collect from a specific customer. Sometimes after the write-off, bad debt is recovered. The company must reverse the earlier write-off.

The effect on net income under the allowance method versus the direct write-off method.