The records of Blue Spruce Company at the end of the current year show Accounts Receivable $93,900, Credit Sales $988,200; and Sales Returns and Allowances $48,800.

(a)

If Blue Spruce uses the direct write-off method to account for uncollectible accounts and Blue Spruce determines that Matisses $1,098 balance is uncollectible, what will Blue Spruce record as bad debt expense?

Bad debt expense

:

(b)

If Allowance for Doubtful Accounts has a balance of $1,342 and Blue Spruce concludes bad debts are expected to be 10% of accounts receivable, what will Blue Spruce record as bad debt expense?

Bad debt expense