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Wren Company had the following account balances at December 31, 2008: Account receivable 4,500,000 Allowance for doubtful accounts before any provision for 2005 doubtful accounts
Wren Company had the following account balances at December 31, 2008:
Account receivable 4,500,000
Allowance for doubtful accounts before any
provision for 2005 doubtful accounts expense 80,000
Credit sales for 2005 8,750,000
Wren is considering the following methods of estimating doubtful accounts expense for 2008:
Based on Credit sales at 2%
Based on accounts receivable at 5%
What should be charged to doubtfulaccounts expense using the percentage of sales and percentage of receivable method?
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