The Manda Panda Company uses the allowance method to account for bad debts. At t

Question

The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, the allowance account had a credit balance of $84,200. Credit sales for 2018 totaled $2,870,000 and the year-end accounts receivable balance was 510,000. During this year, $82,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 2% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31. Required: 2. What is the bad debt expense that Manda Panda should report in its 2018 income statement? 3. Prepare the a 4. Complete the table below to calculate the net realizable value Manda Panda should report in its ry to record the contingency 2018 balance sheet? Complete this question by entering your answers in the tabs below. Does this situation describe a loss contingency? Prey 1 of 10 Next >

Explanation / Answer

1.

Since it is based on the outcome of a future event and the quantity can be reasonably estimated.

2. Bad debt expense to be reported in the 2018 income statement = 2% x $2870000 = $57400

3.

4.

Loss contingency Yes

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.