i. Your company is expecting thousands of credit sales transactions each week with...
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i. Your company is expecting thousands of credit sales transactions each week with terms of net 30 days. The company uses the allowance method and it prepares weekly financial statements. It believes that 0.001 of its credit sales will be uncollectible. The company's credit sales for its first week of operations are $500,000. The credit sales for its second week are $600,000. What will be the balance in Allowance for Doubtful Accounts at the end of the second week of operations? ii. What do we mean by net realizable value of accounts receivable? iii. KLM Company has the net sales for the month are $800,000, and bad debts are expected to be 1.5% of net sales. The KLM uses the percentage-of-sales basis. If the Allowance for Doubtful Accounts has a credit balance of $15,000 before adjustment, what is the balance after adjustment? iv. what are the differences between direct write off method and allowance method? Which method is better suited to expense recognition principle? Why
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