1a)

b)

DejaVu Company has been in business for several years and has the following information for its operations in the current year: Total credit sales Bad debts written off in the year Accounts receivable balance on December 31 (after writing off the bad debts above 523,000 $3,051,000 65,000 Your answer is incorrect. Try again. Assume that Dejavu Company decides to estimate its bad debts expense at 2% of credit sales. i. What amount of bad debts expense will the company record if it has a credit balance (before adjustment) of $5,200 in its Allowance for Doubtful Accounts on December 31? Bad debts expense 55,820 ii. What amount of bad debts expense will it record if there is a debit balance (before adjustment) of $5,200 in its Allowance for Doubtful Accounts on December 31? Bad debts expense 66,220