Buster's Furniture provides the following information for the year: Required Estimate bad debt expense for the year
Question:
Required
Estimate bad debt expense for the year as
(a) 5% of accounts receivable
(b) 2% of net credit sales.
Discuss why Buster's Furniture might choose one approach over the other.
Transcribed Image Text:
Net credit sales for the year Accounts receivable at year end Allowance for bad debts at year end $985,750 450,000 18,000 credit
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a 450000 X 5 22500 22500 18000 4500 bad debt expense b 985750 X 2 19715 bad debt exp...View the full answer
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