Question

Bad debts expense is estimated by the percent-of-sales method. The management estimates that 3% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2015 and prepare the Journal Entry.

Answer 1

Explanation:

Total Sales = 75,000

Bad debt = 75,000*3%  =  2250

Entry:                                                                  Debit            Credit

Bad debt expense                                              2250

Allowance for Doubtful debt                                                  2250