Bad Debt Expense: Percentage of Credit Sales Method

Bradford Plumbing had the following data for a recent year:

Credit sales	$547,900
Allowance for doubtful accounts, 1/1 (a credit balance)	8,740
Accounts receivable, 1/1	42,340
Collections on account receivable	489,770
Accounts receivable written off	14,250

Bradford estimates that 2.4% of credit sales will eventually default.

Required:

1. Compute bad debt expense for the year (rounding to the nearest whole number). $fill in the blank 1

2. Determine the ending balances in accounts receivable and allowance for doubtful accounts.

	Ending Balance
Accounts receivable	$fill in the blank 2
Allowance for doubtful accounts	$fill in the blank 3