The balances of selected accounts of the Dexter Company on December $31,20$X$1,$ are given below:

Accounts Receivable

Allowance for Doubtful Accounts $($credit$)$

Total Sales

Sales Returns and Allowances $($total$)$

$$870,000$

$3,200$

$9,970,000$

$242,000$

$($Credit sales were $$8,520,000.$ Returns and allowances on these sales $$200.)$

Required:

Compute the amount to be charged to Uncollectible Accounts Expense under each of the following different assumptions:

a$.$ Uncollectible accounts are estimated to be $0\mathrm{.}3$ percent of net credit sales.

b$.$ Experience has shown that about $3\mathrm{.}4$ percent of the accounts receivable will prove worthless.

Suppose Allowance for Doubtful Accounts has a debit balance of $$2,700$ instead of a credit balance of $$3,200,$ but all other

account balances remain the same. Compute the amount to be charged to Uncollectible Accounts Expense under each

assumption in item $1.$

Analyze:

If you were the owner of Dexter Company and wished to maximize profits reported for $20$X$1,$ which method would you prefer to

Complete this question by entering your answers in the tabs below.

Req $1a$

Req $1$b

Req $2b$

Analyze

Uncollectible accounts are estimated to be $0\mathrm{.}3$ percent of net credit sales. Compute the amount to be charged to

Uncollectible Accounts Expense. $($Round your "Estimated loss rate" to $3$ decimal places, i$.$e$.1\mathrm{.}2\%$ should be entered as

$0\mathrm{.}012.)$