Question:

Accounting helppp.... plz?

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Information related to Jems Company for 2012 is summarized below.

Total credit sales $2,211,190

Accounts receivable at December 31 828,320

Bad debts written off 33,207

1. What amount of bad debts expense will Jems Company report if it uses the direct write-off method of accounting for bad debts?

2. Assume that Jems Company estimates its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Jems record if it has an Allowance for Doubtful Accounts credit balance of $7,111?

3. Assume that Jems Company estimates its bad debts expense based on 7% of accounts receivable. What amount of bad debts expense will Jems record if it has an Allowance for Doubtful Accounts credit balance of $3,131?

4. Assume the same facts as in previous question, except that there is a $3,131 debit balance in Allowance for Doubtful Accounts. What amount of bad debts expense will Jems record?

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1 ANSWERS


  1. 1.  $33207 (not legal gaap.)

    2.  $44223.80

    3.  $54851.40

    4.  $61113.40

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