menu
bartleby
search
close search
Hit Return to see all results

Use the following information to answer the next two questions:Lewis Company uses the allowance method for recording its expected creditlosses. It estimates bad debts at 2% of credit sales, which were $900,000 duringthe year. On December 31, the Accounts Receivable balance was $150,000, andthe Allowance for Doubtful Accounts had a balance of $12,200 beforeadjustments.What is the amount of bad debt expense Lewis Company will report on theirIncome Statement this year?Select one:Oa. 3,000b. 18,000C. 2,756d. 17,756O e. 12,200

Question

Also, at what amount will accounts receivable bre reported on Lewis’s December 31 Balance Sheet (what is the Net Realizable Value of its accounts receivables)

Use the following information to answer the next two questions:
Lewis Company uses the allowance method for recording its expected credit
losses. It estimates bad debts at 2% of credit sales, which were $900,000 during
the year. On December 31, the Accounts Receivable balance was $150,000, and
the Allowance for Doubtful Accounts had a balance of $12,200 before
adjustments.
What is the amount of bad debt expense Lewis Company will report on their
Income Statement this year?
Select one:
O
a. 3,000
b. 18,000
C. 2,756
d. 17,756
O e. 12,200
help_outline

Image Transcriptionclose

Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: O a. 3,000 b. 18,000 C. 2,756 d. 17,756 O e. 12,200

fullscreen
check_circleAnswer
Step 1

Calculate bad debt expense amount reported in the income statement:

 

fullscreen
Step 2

Conculsion:

$18,000 would be recorded as a bad debt expense amount in the income statement.

Therefore, option B, $18,00...

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in

Business

Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Other accrued liabilities—warranties Kohl Co. provides warranties for many of its products. The Janu...

A: Warranty expense: It is an estimated expense which arises when the company sells the products. There...

question_answer

Q: Life-Cycle Costing Kate Stephens, the COO of BioDerm, has asked her cost management team for a produ...

A: Click to see the answer

question_answer

Q: The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thi...

A: Click to see the answer

question_answer

Q: Hi, Need help with equation -  Also see attached  Profit=(P x Q - V x Q) - Fixed expenses  Thanks, L...

A: Cost Volume-Profit (CVP) is a management accounting tool that expresses relationship among total sal...

question_answer

Q: Wildhorse Co. purchased equipment on January 1 at a list price of $155000, with credit terms 3/10, n...

A: Compute the total cost of new equipment: 

question_answer

Q: are the answers correct?

A: Standard input/output means the budgeted or planned input or output.Variances are computed as differ...

question_answer

Q: Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the com...

A: 1. It is to be noted that the fixed manufacturing cost is $270,000 every year within the production ...

question_answer

Q: Indicate whether each of the following activities would be reported on the statement of cash flows a...

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for ...

question_answer

Q: Betty Boop started a small toy factory, Boopy Doop, Inc., in her garage and incorporated it in March...

A: Depreciation: Depreciation is an amount of reduction in the worth of a fixed asset during its useful...

Sorry about that. What wasn’t helpful?