ACC 220 Chapter 7 Accounts Receivable Valuation and Notes Receivable Percentage of Sales Method Problem 1 Zeta Company management estimates that 3% of Net Credit Sales will eventually become uncollectible. Certain account balances at 12/31/20 are: Net Sales $500000; Sales Returns and Allowances $40,000; Accounts Recelvable $200,000 and Allowance for Doubtful Accounts $11,000. Balances at 12/31/19 are: Net Sales $600,000; Sales Returns and Allowances $50,000; Accounts Receivable $250,000 and Allowance for Doubtful Accounts $4,300. Make the adjusting entry at 12/31/20 to record the estimate for bad debts. Problem 2 Xtra Company estimates that 4% of Net Credit Sales will become uncollectible. If Net Credit Sales equal $360000, Accounts Recelvable \$175,000 and AFDA \$12000, make the adjusting entry to record the estimate for bad debts