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Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: O a. 3,000 b. 18,000 C. 2,756 d. 17,756 O e. 12,200

Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: O a. 3,000 b. 18,000 C. 2,756 d. 17,756 O e. 12,200

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 5MC: Tines Commerce computes bad debt based on the allowance method. They determine their current years...
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Also, at what amount will accounts receivable bre reported on Lewis’s December 31 Balance Sheet (what is the Net Realizable Value of its accounts receivables)

Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: O a. 3,000 b. 18,000 C. 2,756 d. 17,756 O e. 12,200
Transcribed Image Text:Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: O a. 3,000 b. 18,000 C. 2,756 d. 17,756 O e. 12,200
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