Percent of Sales Method At the end of the current year, Accounts Receivable has a...
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Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $3,460,000; Allowance for Doubtful Accounts has a debit balance of $12,500; and sales for the year total $46,300,000. Bad Debt Expense is estimated at 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. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable. 3,460,000 Feedback Check My Work . Remember that since accounts receivable are created by credit sales unco e tible accounts can be es ated as a percent of credit sales. lf the or on o credit sale constant, the percent may be applied to total sales. b. Under the percent of sales method, the amount of the adjustment is the amount estimated for Bad Debt Expense. c. Remember that net realizable value is the amount that is expected to be collected or realized. to sales i, elative Learning Objective 4
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