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1. Information related to Tesco Company for 2020 is summarized below. Total credit sales $1,200,000...

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Accounting

1. Information related to Tesco Company for 2020 is summarized below. Total credit sales $1,200,000 Accounts receivable at December 31 370,000 Bad debts written off 25,150 Instructions (a) What amount of bad debts expense will Tesco Company report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Tesco Company decides to estimate its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Tesco record if Allowance for Doubtful Accounts has a credit balance of $3,000? (c) Assume that Tesco Company decides to estimate its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Tesco Company record if Allowance for Doubtful Accounts has a credit balance of $4,000? (d) Assume the same facts as in (c), except that there is a $2,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debts expense Tesco record? (e) What is the weakness of the direct write-off method of reporting bad debts expense

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