Journal entries lor the allowance method. Data related to sales on account of Heath Company for its first three years of operations appear below:

Sales on Account Accounts Written Off as Uncollectible in Year Year 6 7 8 9 10 Total 6

7 8

$ 340,000 450,000 580,000

$1,370,000

$1,800 $5,800 2,500 $ 3,000 8,200 2,900

$14,100

$ 3,400 12,700

$16,100 $3,300

$3,300

$10,600 14,100 17,900

$1,800 $8,300 $42,600 Heath Company estimates that 3 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 6, Year 7, and Year X using the allowance method.

b. Does 3 percent of sales on account appear to be a reasonable rate for estimating uncollectibles?