The Dubious Company operates in an industry where all sales are made on account. The...
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The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses of 1.20% of credit sales in prior periods. Presented below is the company's forecast of sales and expens es over the next three years. Year 1 Year 2 Sales Revenue$ 381,000 387,000 Unknown 338,000 Unknown Year 3 386,000 Unknown 335,750 Unknown Bad Debt Expense Unknown Other Expenses330,000 Unknown Net Income Required a. Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as 1.20% of sales Year 1 Year 2 Year 3 Bad Debt Expense Net Income C. Assume that the company changes its estimate of uncollectible credit sales to 1.20% in year 1, 2.20% in year 2 and 1.70% in year 3. Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario Year 1 Year 2 Year 3 Bad Debt Expense Net Income
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