What will joex corp record as bad debt expense

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Reference no: EM132493646

Xercise Cycles Company sells exercise equipment to gyms on account. At year end, the following accounts receivable were uncollected.

Customer

Amount

.

Invoice                           oday's Date

Number of
Days Unpaid

Fitness Mania

$                  2.500

6/17/2016

12/31/2016

197

Health for Life

2,000

12/21/2016

12/31/2016

10

Holistic Health Options

12,750

10/12/2016

12/31/2016

80

Image Reimaging

7.000

12/5/2016

12/31/2016

26

Today's Gym World

4,600

11/29/2016

12/31/2016

32

Whole Life Fitness Center

15900

11/20/2016

12/31/2016

41

Workouts Unlimited

3,800

10/2/2016

12/31/2016

90

Total

5              48550

 

Problem 1: JoeX Corp uses the percentage of credit sales method to estimate Bad Debt Expense, and they find that they have $2,350,000 in credit sales for the year ended 2019. JoeX estimates that 0.15% of their credit sales will be uncollectable. Prior to the adjustment, the Allowance for Doubtful Accounts has a credit balance of $235. What will JoeX Corp record as Bad Debt Expense for 2019? (do not enter commas)

Problem 2: Using the aging-of-accounts-receivable method to estimate bad debt, Avidity Corporation estimates that $3,550 of its accounts receivable will be uncollectible. Prior to adjustment, the Allowance for Doubtful Accounts has a credit balance of $800. The adjusting entry to record Bad Debt Expense will be for:
a. 4350

b. 800

c. 3550

d. 2750

 

Reference no: EM132493646

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