Goofy Company, which has been in business for three years, makes all sales on account and does not offer discounts. The firm's sales, collections, and write-offs of doubtful accounts are shown below:
Required:
a. If the firm uses the direct write-off method of recognizing credit losses during the three years:
(1) Determine the total amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Give the total amount of bad debts expense appearing on the firm's income statement over the three-year period.
b. If the firm uses the allowance method of recognizing credit losses, at 1.5% sales:
(1) Give the net amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Determine the total amount of bad debts expense appearing on the firm's income statement over the three-year period.

Question

Goofy Company, which has been in business for three years, makes all sales on account and does not offer discounts. The firm's sales, collections, and write-offs of doubtful accounts are shown below: 
  Required:
a. If the firm uses the direct write-off method of recognizing credit losses during the three years:
(1) Determine the total amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Give the total amount of bad debts expense appearing on the firm's income statement over the three-year period.
b. If the firm uses the allowance method of recognizing credit losses, at 1.5% sales:
(1) Give the net amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Determine the total amount of bad debts expense appearing on the firm's income statement over the three-year period.

Quizplus · Accepted Answer

The Answer of Goofy Company, which has been in business for three years, makes all sales on account and does not offer discounts. The firm's sales, collections, and write-offs of doubtful accounts are shown below: 
  Required:
a. If the firm uses the direct write-off method of recognizing credit losses during the three years:
(1) Determine the total amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Give the total amount of bad debts expense appearing on the firm's income statement over the three-year period.
b. If the firm uses the allowance method of recognizing credit losses, at 1.5% sales:
(1) Give the net amount of accounts receivable appearing on the balance sheet at the end of the third period.
(2) Determine the total amount of bad debts expense appearing on the firm's income statement over the three-year period.

Goofy Company, Which Has Been in Business for Three Years