signmen ents&llakeAssignmentSessionLocator-assignment-take&inprogress-fa... Chapter 09 Homework (Application) eBook Calculator Print Item Compare Two Methods of Accounting for Uncollectible Receivables Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of urn Information is requested as to the effect that an annual provision of Y % of sales would have had considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data collectible accounts, the company is considering changing to the allowance method. on the amount of bad debt expense reported for each of the past four years. It is also have been obtained from the accounts: Year of Origin of Accounts Receivable Written Off as Uncollectible Uncollectible Accounts Written Off Year Sales 1st 2nd 3rd 4th 1st $1,380,000 2nd 1,670,000 3rd 2,570,000 4th 3,210,000 Required 1. Assemble the desired data. Enter a decrease in the amount of expense as a negative number and all other amounts as positive numbers. $1,250 2,850 11,200 15,750 $1,250 1,350 3,250 $1,500 2,600 3,600 $5,350 5,350 $6,800 Call Systems Company Schedule of Bad Debt Expense Year Expense Actually Reported Expense Based on Estimate Increase (Decrease) in Amount of Expense Balance of Allowance Account, End of Year 1st 1.250v 2nd 1,500 x Check My Work The expense actually reported is the uncollectible writeoff for each quarter Consider the estimate and the actual expense and the time period covered. Compare the first two years and the last two years. 2. Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as un collecti ie. Does the estimate of % Check My Work Previous Next