The Dubious Company operates in an industry where all sales are made on account. The company...

Transcribed Image Text:

The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.50% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 378,000 Year 2 $ 384,000 Year 3 $ 383,000 Unknown 334,000 Unknown 336,000 Unknown 340,750 Unknown Unknown Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.50% of sales b. Assume that the company changes its estimate of uncollectible credit sales to 1.50% in Year 1, 2.50% in Year 2 and 2.00% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Complete this question by entering your answers in the tabs below. Required A Required B Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.50% of sales. Bad Debt Expense Net Income Year 1 Year 2 Year 3 Requin & Required B > The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.50% of credit sales in prior periods. Presented below is the company's forecast of sales and expenses over the next three years. Sales Revenue Bad Debt Expense Other Expenses Net Income Year 1 $ 378,000 Year 2 $ 384,000 Year 3 $ 383,000 Unknown 334,000 Unknown 336,000 Unknown 340,750 Unknown Unknown Unknown Required: a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.50% of sales b. Assume that the company changes its estimate of uncollectible credit sales to 1.50% in Year 1, 2.50% in Year 2 and 2.00% in Year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario. Complete this question by entering your answers in the tabs below. Required A Required B Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.50% of sales. Bad Debt Expense Net Income Year 1 Year 2 Year 3 Requin & Required B >