Problem 6 CPA Co. was organized on January 1, 2017. An analysis of the company's allowance for bad debts account reveals the following: Estimated bad debts P 15,000 26,000 Actual bad debts P 3,000 5,000 Year 2017 2018 9,500 8,000 2019 35,000 2020 No provision yet In the past, bad debts had been estimated at 3% of credit sales. The accountant has determined that the 3% rate is inappropriate and suggested that it be revised downward to 1%. Credit sales for the year ended December 31, 2020 totaled P950,000. _7. What is the bad debts expense for the year ended December 31,2010 as a result of the accounting change?
Problem 6 CPA Co. was organized on January 1, 2017. An analysis of the company's allowance for bad debts account reveals the following: Estimated bad debts P 15,000 26,000 Actual bad debts P 3,000 5,000 Year 2017 2018 9,500 8,000 2019 35,000 2020 No provision yet In the past, bad debts had been estimated at 3% of credit sales. The accountant has determined that the 3% rate is inappropriate and suggested that it be revised downward to 1%. Credit sales for the year ended December 31, 2020 totaled P950,000. _7. What is the bad debts expense for the year ended December 31,2010 as a result of the accounting change?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 65E: Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared...
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