AP Here is information related to Morgane Company for 2022.

Compute bad debt amounts.

Total credit sales

$1,500,000

Accounts receivable on December 31

840,000

Bad debts are written off

37,000

Instructions

a. What amount of bad debt expense will Morgane Company report if it uses the direct write-of

method of accounting for bad debts?

b. Assume that Morgane Company uses the percentage-of-receivables basis to record bad debt

expense and concludes that 4% of accounts receivable will become uncollectible. What amount

of bad debt expense will the company record if Allowance for Doubtful Accounts has a credit

balance of $3,000?

Bad Debt Exp. $30,600