Problem - A trial balance for Green Company before adjustment included the following:
Debit
Credit
Accounts receivable $140,000
Allowance for doubtful accounts 730
Sales $610,000
Sales returns and allowances 8,000
Instructions: Calculate bad debt expense assuming that the estimate of uncollectible accounts is determined by taking
(1) 5% of gross accounts receivable;
(2) 3% of gross accounts receivable and assume a $600 debit balance;
(3) 10% of net sales.