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Estimating Bad Debt Expense: A company uses the percentage-of-sales approach to estimate bad debts. Sales...

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Accounting

Estimating Bad Debt Expense:

A company uses the percentage-of-sales approach to estimate bad debts. Sales for the year were $750,000, and gross profit was $450,000. The company estimates that 5% of sales are uncollectible.

REQUIRED:

What is the companys estimated bad debt expense for the year?

Would your answer change if the company was able to increase its gross profit from its sales?

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