Compute Bad Debts Expense Based on the Following Information

question 249

Essay

Compute bad debts expense based on the following information:
(a) Ramsey Company estimates that 1% of net credit sales will become uncollectible. Sales are $600,000, sales returns and allowances are $30,000, and the allowance for doubtful accounts has a $6,000 credit balance.
(b) Ramsey Company estimates that 3% of accounts receivable will become uncollectible. Accounts receivable are $150,000 at the end of the year, and the allowance for doubtful accounts has a $900 debit balance.

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Definitions:

Nonjudgmental

Refers to an attitude or approach that avoids making premature judgements or evaluations, typically in the context of understanding or interacting with others.

Assertive

Being confident without being aggressive; to express one's needs, desires, or opinions in a respectful and clear manner.

Aggressive

Expressing one’s interests while denying the rights of others by blaming, judging, and evaluating other people.

Impromptu Talking

Speaking unprepared and spontaneously in front of an audience, without prior planning or rehearsal.