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Nair's Manufacturing Company is looking at changing its method of reporting bad debts expense. In past years, the company has been able to use the
Nair's Manufacturing Company is looking at changing its method of reporting bad debts expense. In past years, the company has been able to use the direct write off method but has experienced significant growth in recent years. The accountants have prepared the following aging schedule based upon current accounts recelvable volume. Accounts Receivable $516,260 1. Use the aging analysis to compute the estimated amount of uncollectible receivables. 2 Prepare the journal entry to record the estimated uncollectibles. 3. Instead of the aging method, compute the estimated bad debts to be: a) 25% of net credit sales. b) 3.5% of gross accounts receivable
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