Problem

Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of CreditSales Me...

Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of CreditSales Method

During 2011, Sow Electronics, Incorporated, recorded credit sales of S790,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales.

Required:

Prepare journal entries for each transaction:

a. The appropriate bad debt expense adjustment was recorded for the year 2011.

b. On December 3 1. 2011, an account receivable for 5360 from a prior year was determined to be uncollectible and was written off.

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