The Following Is a Portion of the Current Assets Section

question 58

Essay

The following is a portion of the current assets section of the balance sheets of The Sweet Cafe at December 31, 2020 and 2019:
$$\begin{array} { | l | l | l | } \hline & 12 / 31 / 20 & 12 / 1 / 19 \\\hline \begin{array} { l } \text { Accounts receivable, less allowance for bad debts of } \$ 14,400 \\\text { (for } 2020 ) \text { and } \$ 10,200 ( \text { for } 2019 )\end{array} & \$ 487,200 & \$ 431,600 \\\hline\end{array}$$ (a.)If bad debts expense for 2020 totaled $32,800, what was the amount of accounts receivable written off during the year?
(b.)The December 31, 2020, Allowance account balance includes $6,800 for a past due account that is not likely to be collected.This account has not been written off.If it had been written off, what would have been the effect of the write off on:
(1.)The current ratio at December 31, 2020?
(2.)Net income and ROE for the year ended December 31, 2020?
(c.)What do you suppose was the level of The Sweet Cafe's sales in 2020, compared to 2019? Explain your answer.

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