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When solving for bad debt expense, why do we use net sales. Isn't that an income statement account? Shouldn't we use jus tthe increase in
When solving for bad debt expense, why do we use net sales. Isn't that an income statement account? Shouldn't we use jus tthe increase in A/R? Or is the net sales a good estimate for the increase in A/R, ie excluding sales discounts?
Inferring Bad Debt Write-Offs and Cash Collections from Customers Microsoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its recent financial statements, Microsoft reported the following information about net sales revenue and accounts receivable (amounts in millions). Source: Microsoft Corporation According to its Form 10-K, Microsoft recorded bad debt expense of $116 and there were no bad debt recoveries during the current year. (Hint: Refer to the summary of the effects of accounting for bad debts on the Accounts Receivable (Gross) and the Allowance for Doubtful Accounts T-accounts. Use the T-accounts to solve for the missing values.) Required: 1. What amount of bad debts was written off during the current yearStep by Step Solution
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