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As the management accountant for the Tyson Company you have been asked to construct a financial planning model for collection of accounts receivable and then
As the management accountant for the Tyson Company you have been asked to construct a financial planning model for collection of accounts receivable and then to perform a what If analysis in terms of the assumption regarding estimated uncollectible accounts. You are provided with the following information Collection Pattern for Credit Sales 55% of the company's credit sales are collected in the month of sister, 40% in the month following the month of sale, and 5% are uncollectible Credit Sales January 2019, $102,000: February 2019, $124,000 March 2019, 5123,500. Required: 1. Prepare an estimate of bad debts for each of the three months. January through March under the following assumptions regarding the rate of uncollectible accounts: 19,3%.5% (base case), and 8%. Estimated nd Debts Expense January February March Assumed Rate of aro txpense 15 31 5
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