Explaining why a difference is bad debts expense

Assignment Help Accounting Basics
Reference no: EM13235769

As the accountant for Pure-Air Distributing, you attend a sales managers' meeting devoted to a discussion of credit policies. At the meeting, you report that bad debts expense is estimated to be $59,000 and accounts receivable at year-end amount to $1,750,000 less a $43,000 allowance for doubtful accounts. Sid Omar, a sales manager, expresses confusion over why bad debts expense and the allowance for doubtful accounts are different amounts. Write a one-page memorandum to him explaining why a difference is bad debts expense and the allowance for doubtful accounts is not unusual. The company estimates bad debts expense as 2% of sales. 

Required minimum-2  page

Reference no: EM13235769

Questions Cloud

Evaluate challenges that for-profit public companies face : Evaluate the challenges that for-profit public companies face from recurrent scandals, political attacks and alternative corporate structures such as the B-corp. Can public companies survive? Should they survive?
How does the change affect the incentives for working : A 1996 nill reforming the federal goverment's antipoverty programs limited many welfare recipients to only two years of benefits.A. How does this change affect the incentives for working
Consolidated tax returns : Consolidated Tax Returns
Describe several structural decisions : How would the decisions made in each of these areas compare to the decisions mae by Dell Computer? Define Dell's operations strategy and its key competive priorities.
Explaining why a difference is bad debts expense : Write a one-page memorandum to him explaining why a difference is bad debts expense and the allowance for doubtful accounts is not unusual. The company estimates bad debts expense as 2% of sales.
What is the magnitude of the electric field in the capacitor : The plates of a 631-pF parallel plate capacitor are separated by 1.21 mm, what is the magnitude of the electric field in the capacitor
Explain the types of research to forecast market reaction : Consider that this product is to receive no promotion other than what the retailer will give it, and the product will be offered at a competitive price. Assume the new diaper's name will not be associated
What happened to renting books : What happened to renting books? It is only giving me the option to purchase. I refuse to purchase text books.
Describe several structural decisions : How would the decisions made in each of these areas compare to the decisions made by a high-quality hotel like a Four Seasons?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Debt service activities in government-wide statements

How should governments report their capital projects and debt service activities in their government-wide statements?

  Investment in common stock

A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares help by the investor requires:

  Determine the amount of manufacturing overhead

Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

  Disposition of assets

Please indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

  Develop a gantt chart- costs of a level production strategy

Develop a Gantt chart to determine the total time required to process all six jobs. Determine the costs of a level production strategy for the next six months, with an ending inventory of 8,000 pounds.

  Book vaule of the equipment

On January 1, 2010 M. Johnson Company purchased equipment for $30,000. The company is depreciating the equipment at the rate of $500 per month. The book vaule of the equipment at December is?

  Company adopting pension plan

When a company adopts a pension plan, prior service costs should be charged to

  Opinion regarding potential liability

Teddy's Supplies' CEO has asked you to advise him on the facts of the case and your opinion of their potential liability. He wants to settle the case. Write a memo to him that states your view of whether the company is exposed to liability on all ..

  Determining the total amount of the credit

What is the amount of the low-income housing credit that Chris may claim in 2005 (assuming a rate of 7.96%)? What is the total amount of the credit that Chris may claim as a result of the $800,000 expenditure?

  Homemade dividend in two years

The required return on Avondale stock is 15 percent. If you want only $225 total in dividends the first year, what will your homemade dividend be in two years.

  Costing method of inventory

Jaclyn is going to the company's primary bank to negotiate a line of credit and wants to show the maximum amount of income without actually changing last year's results. What costing method of inventory(variable or absorption) should she choose? W..

  Computing the gross profit percentage

What is the amount of the gross profit? Compute the gross profit percentage (gross profit divided by sales). Will the income statement necessarily report a net income? Explain"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd