Information related to DeJong Company for 2019 is summarised
below.
Total credit sales | $1,640,000 | |
Accounts receivable as at 30 June | 620,000 | |
Doubtful debts written off | 26,000 |
Required
(a) What amount of doubtful debts expense will
DeJong Company report if it uses the direct write-off method of
accounting for doubtful debts?
$
(b) Assume that DeJong Company decides to estimate
its doubtful debts expense to be 2% of credit sales. What amount of
doubtful debts expense will DeJong record if Allowance for doubtful
debts has a credit balance of $3,000?
$
(c) Assume that DeJong Company decides to estimate
its doubtful debts expense based on 5% of accounts receivable. What
amount of doubtful debts expense will DeJong Company record if
Allowance for doubtful debts has a credit balance of $4,000?
$
(d) Assume the same facts as in (c), except that
there is a $2,000 debit balance in Allowance for doubtful debts.
What amount of doubtful debts expense will DeJong record?
$
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