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The following information relates to EDEN LTD for 2020: Accounts receivable at 30 June 2020 $66,000 Bad debts written off $5,900 Required: (5 Marks) a)
The following information relates to EDEN LTD for 2020: Accounts receivable at 30 June 2020 $66,000 Bad debts written off $5,900 Required: (5 Marks) a) What amount of bad debts expense will EDEN LTD report if it uses the direct writeoff method of accounting for bad debts? b) Assume that EDEN 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 $2,600 at 31 December 2015? c) Assume the same facts as in part (b), except that there is debit balance of $2,150 in Allowance for Doubtful Debts. What amount of bad debts expense will EDEN LTD record
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