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Percent of Sales Method

Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $805,000; Allowance for Doubtful Accounts has a debit balance of $7,000; and sales for the year total $3,620,000. Bad debt expense is estimated at 1/4 of 1% of sales.

a.  Determine the amount of the adjusting entry for uncollectible accounts.

b.  Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

  Adjusted Balance
Debit (Credit)
Accounts Receivable $
Allowance for Doubtful Accounts $
Bad Debt Expense $


c.  Determine the net realizable value of accounts receivable.


Sep 21 2020 Read more Less More

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