Information related to Izmir A.S¸. for 2017 is summarized below.

Total credit sales…………………………….₺920,000

Accounts receivable at December 31............369,000

Bad debts written off...............................23,400

Instructions

(a) What amount of bad debt expense will Izmir report if it uses the direct write-off method of accounting for bad debts?

(b) Assume that Izmir decides to estimate its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Izmir record if Allowance for Doubtful Accounts has a credit balance of 3,000?

(c) Assume that Izmir decides to estimate its bad debt expense based on 7% of accounts receivable. What amount of bad debt expense will Izmir record if Allowance for Doubtful Accounts has a credit balance of 4,000?

(d) Assume the same facts as in (c), except that there is a 2,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Izmir record?

(e) What is the weakness of the direct write-off method of reporting bad debt expense?