Question

actice Assignment Gradebook ORION Downloadable eTextbook inment CALCULATOR FULL SCREEN NET Problem 8-02A (Video) Information related to Pharoah Company for 2020 is summarized below. Total credit sales Accounts receivable at December 31 Bad debts written off $2,590,000 839,000 34,700 (a) What amount of bad debt expense will Pharoah Company report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Pharoah Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Pharoah record if it has an Allowance for Doubtful Accounts credit balance of $2,800? (c) Assume that Pharoah Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Pharoah record if it has an Allowance for Doubtful Accounts debit balance of $2,800? LINK TO TEXT VIDEOI SIMILAR PROBLEM By accessing this Question Assistance, you will leam while you earn points based on the Point Potential Policy set by your instructor.

Answer 1

(a) Amount of bad debt expense Pharoah Company will report if it use direct write off method is= 34,700 $

(b) If the company estimates bad debt expense based on 5% of accounts receivable, the amount of bad debt expense to record if the balance in allowance account is credit 2800 $ = 39,150 $

(b) If the company estimates bad debt expense based on 5% of accounts receivable, the amount of bad debt expense to record if the balance in allowance account is debit 2800 $ = 44,750 $