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Mama L [17]
3 years ago
5

Cashier's checks Checks Question 5 0/1 pts If Sid Inc. has net sales of $750,000, sales on account of $600,000, and sales return

s and allowances of $50,000, what would be the bad debt expense for the year, assuming that Sid uses an estimate of 12% for bad debts? A. $72,000 B. $66,000 C. $90,000 D. $18,000
Business
1 answer:
IRINA_888 [86]3 years ago
7 0

Answer:

Option A,$72000

Explanation:

Bad debt expense is computed on the net  credit sales amount, in other words, the bad debt expense is 12% of credit sales of $600,000.

Bad debt expense=$600,000*12%

                               =$72000

Option C is wrong because the answer was arrived at by calculating 12% of $750,000 the net sales amount that also has cash sales of $150,000 included in it($750000-$600000)

Option B is wrong as the amount of sales returns and allowances of $50,000 was deducted from $600,000 prior to applying 12% allowance for bad debt

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Answer:

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Grey Wolf, Inc., has current assets of $2,090, net fixed assets of $9,830, current liabilities of $1,710, and long-term debt of
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Answer and Explanation:

The computation is shown below:

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As we know that

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