You have credit sales for the year of 1,000,000. return and allowances are 100.000.You write-off an amount for 50,000 during the year. subsequent to this, you receive 20,000.recovery of this account. The allowance balance before the above is 5,000 credit.If you estimate bad debt expense to be 1/2% of sales, what entries do you make during the year?what if instead of the % of sale method, you use the % of receivables method. Here is the aging:
|
amount of A/R |
% uncollectible |
| 0-30 |
100,000 |
1% |
| 31-60 |
40,000 |
3% |
| 61-90 |
15,000 |
5% |
| 91-120 |
10,000 |
10% |
| 120 over |
5,000 |
30% |
|
|
|
|
170,000 |
|