Agree or Disagree

3. due to the recent deterioration in the age of outstanding accounts receivable, Sheridans controller changed the percentage of accounts receivable from 4.5% to 6% when arriving at the allowance for doubtful accounts for the year ended December 31, 2020. This revision in the percentage used was applied to the previous year and an additional $50,000 was recorded as bad debt expense for the year ended December 31, 2019

4. The controller changed the classification of one expense on the comprehensive income statements for 2020 and 2019. The expense had been previously reported as a selling expense and is now reclassified as an administrative expense. The controller didn't agree with the treatment given in prior years. Nothing was mentioned in the financial statements concerning implementing this change as he reasoned that net income and any key financial ratios remained unaffected 5. During the year, Sheridan had an opportunity to buy equipment at an auction when its competitor went bankrupt. The equipment had to be purchased as bundles. Some of the equipment in the bundle purchased could be used by Sheridan immediately. Some of the equipment in the bundle did not fit the company's operations and had to be held for resale. The resale was expected to take place early in 2021. The purchase price of the bundle of equipment was added to property, plant, and equipment and depreciated in 2020. The controller mentioned that the price paid for the equipment was such a bargain that any future gain or loss from the resale of equipment will not have any material effect on net income. w