The vice president for Tres Corporation provides you with the following list of accounts receivable written off

Question:

The vice president for Tres provides you with the following list of written off in the current year. (These accounts were recognized as bad debt expense at the time they were written off; i.e., the company was using the direct write-off method.)

The vice president for Tres Corporation provides you with the

Tres Corporation's sales are all on a n/30 credit basis. Sales for the current year total $3,600,000, and analysis has indicated that uncollectible receivable losses historically approximate 1.5% of sales.
1. Do you agree or disagree with Tres Corporation's policy concerning recognition of bad debt expense? Why or why not?
2. If Tres were to use the percentage of sales method for recording bad debt expense, by how much would income before income taxes change for the current year?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...