Question
Baxter Ltd recorded sales of $420,000 during the year with $320,000 being on credit. Bad debts in the past have averaged 3% of credit sales
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Baxter Ltd recorded sales of $420,000 during the year with $320,000 being on credit. Bad debts in the past have averaged 3% of credit sales and the company uses this information as the basis to estimate the provision for doubtful debts. The estimate of the provision for doubtful debts for the year is:
a. $9,600
b. $12,600
c. nil.
d. $3,000
Baxter Ltd recorded sales of $420,000 during the year with $320,000 being on credit. Bad debts in the past have averaged 3% of credit sales and the company uses this information as the basis to estimate the provision for doubtful debts. The estimate of the provision for doubtful debts for the year is:
| a. | $9,600 | |
| b. | $12,600 | |
| c. | nil. | |
| d. | $3,000 |
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