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i need help with all of these questions. please help thank you PSA7-7 The following information relates to Eason Ltd for 2016: Total credit sales
i need help with all of these questions. please help thank you
PSA7-7 The following information relates to Eason Ltd for 2016: Total credit sales Accounts receivable at 31 December 2016 Bad debts written off $200 ooo 46 000 2 900 Required a. What amount of bad debts expense will Eason Ltd report if it uses the direct write-off method of accounting for bad debts? b. Assume that Eason Ltd decides to estimate its bad debts expense based on 5% of accounts receivable. What amount of bad debts expense will the business record if it has an Allowance for Doubtful Debts credit balance of $1600 at 31 December 2015? c. Assume the same facts as in part (b), except that there is debit balance of $1150 in Allowance for Doubtful Debts. What amount of bad debts expense will Eason Ltd record? d. What is the weakness of the direct write-off method of reporting bad debts expenseStep by Step Solution
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