E9-2 Using the allowance method for bad debts (percentage of sales) [15 min] At 30 September, Kangaroo Island Flagpoles had Accounts receivable of $28000 and Allowance for doubtful debts of $1000. During October, Kangaroo Island recorded: a sales of $180 000 ($160 000 on credit; $20000 for cash) b collections on account, $130 000 c bad debt expense, estimated as 2% of credit sales d write-offs of bad debts, $2400. Requirements 1 Journalise sales, collections and bad debt expense by the allowance method (percentage of sales method) and write-offs of bad debts during October. 2 Prepare T-accounts to show the ending balances in Accounts receivable and Allowance for doubtful debts. Calculate net accounts receivable at 31 October. How much does Kangaroo Island expect to collect?

The trial balance before adjustment of Ehrlich Company reports the following balances:                                                                                           Dr.                   Cr.    Accounts receivable                                                $420,000 Allowance for doubtful accounts (debit balance)    $  5,000 Sales (all on credit)                                                                         2,000,000 Sales returns and allowances                                     70,000   Instructions – show all calculations   a. Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 5% of gross accounts receivable.   b. Prepare the entry for the estimated bad debts assuming that the company estimates bad debts based on the percentage of sales method, using 2% of net sales.

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17.The following information is provided: Unadjusted balance in Allowance for Doubtful Accounts   $1,100 (debit)Accounts Receivable, December 31                                    245,500Sales Returns and Allowances                                                   5,500Sales                                                                                         850,000Sales Discounts                                                                         15,000 Required:1. Prepare the adjusting entry if bad debts are estimated to be 1.5% of net sales.2. Compute the amount of the adjusting entry if bad debts are estimated to be 3% of ending accounts receivable.

E6-9 (Algo) Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of Credit Sales Method LO6-2 During the current year, Witz Electric, Inc., recorded credit sales of $850,000. Based on prior experience, it estimates a 3 percent bad debt rate on credit sales. Required: Prepare journal entries for each transaction: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. On September 29 of the current year, an account receivable for $3,000 from March of the current year was determined to be uncollectible and was written off. b. The appropriate bad debt expense adjustment was recorded for the current year. View transaction list Journal entry worksheet

K During the year, Taylor Company had net credit sales of $47,000. At the end of the year, before adjusting entries, the balance in Accounts Receivable was $14,000 (debit) and the balance in Allowance for Bad Debts was $610 (credit). If the company uses an income statement approach to estimate bad debts at 7%, what is the ending balance in the Allowance for Bad Debts account? OA. $3,900 O B. $3,290 OC. $2,680 O D. $1,590 CISTERS

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Walgreens provided the following information before any year end adjusments: Net credit sales are $120,000 Historical percentage of credit losses is 2% Allowance for doubtful accounts has a credit balance of $300. Accounts receivables ending balance is $47,000. What is the estimated bad debt expense using the percentage of credit sales method? A. $2,400 B. $2,100 C. $940 D. $2,700