homework for april 9

*sales for july 2006 were 6 million dollars
*we expect that 3% of all credit sales will go bad
*on 10/14/2006 we learn that bob who owed us $8000 died broke


give all related j/e using

a) the direct writeoff methold
b) the % of sales/income stmt approach

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our are a/r and expected default %'s are as follows:
current $300,000 / 2%
1-30 days past due $50,000 /4%
31-60 days past due $10,000 /16%
61-90 days past due $5,000 /30%
>90 days past due $80,000/50%

using the aging method give the j/e at the end of this month if:

case a: ada going into this month was $50,0000
case b: ada going into this month was $500