The Accounting Records of 10Com Ltd

question 2

Essay

The accounting records of 10Com Ltd. show the following for 2012:
*The credit side of the journal entry (or entries)related to this amount went to allowance for doubtful accounts.
** Account write-offs were debited to the allowance for doubtful accounts.
More Info
For 2012, cash sales were $970,000, while credit sales were $720,000. Recently, 10Com's management has become concerned about various estimates used in its accounting system, including those relating to receivables and uncollectible accounts. The company is considering two alternatives.
For the purpose of comparing these two alternatives, the company has made the following estimates for each alternative.
•Alternative 1: Bad debts approximating 0.7% of credit sales.
•Alternative 2: Aging of the accounts receivable at the end of the period, where 80% would incur a 2% loss, while the remaining 20% would incur a 9% loss.
Required:
For each of the two alternatives listed above, calculate the bad debts expense for 2012 and the allowance for doubtful accounts balance at the end of 2012.

Identify the differences between direct and indirect strategies for delivering bad news.

Recognize ethical considerations in business communication, especially in conveying negative news.

Apply positive phrasing and empathy to soften the impact of bad news.

Know the components of an effective bad-news message, including buffers, reasons, explanations, and closing statements.

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Definitions:

Institute of Medicine

An American organization, now known as the National Academy of Medicine, that provides evidence-based advice to policymakers, healthcare professionals, and the public.

Informatics

The study or practice of processing, managing, and retrieving information, particularly through the use of technology, in various fields including healthcare and computing.

Evidence-Based Practice

Use of current best evidence from nursing research, clinical expertise, practice trends, and patient preferences to guide nursing decisions about care provided to patients.

Healthcare Effectiveness

The degree to which healthcare services increase the likelihood of desired health outcomes and are consistent with current professional knowledge.