Journal entries for the allowance method. Data related to sales on account of Schneider Corporation appear below:

Sales on Account Accounts Written Off as Uncollectible in Year Year 1 2 3 4 5 Total 1

2 3

$ 750,000 1,200,000 2,400,000

$4,350,000

$1,300 $ 8,700 2,500

$ 3,900 16,600 3,100

$23,600

$ 3,800 37,800

$41,600

$4,800

$4,800

$ 13,900 22,900 45,700

$1,300 $11,200 $82,500 Schneider Corporation estimates that 2 percent of sales on account will ultimately become uncollectible. Uncollectible accounts generally occur within three years of the year of sale.

a. Prepare journal entries to recognize bad debt expense and to write off uncollectible accounts for Year 1, Year 2, and Year 3 using the allowance method.

b. Does 2 percent of sales on account appear to be a reasonable rate for estimating uncollectibles?