CP 9-5 Estimate uncollectible accounts For several years, Xtreme Co.'s sales have been on a "cash only" basis. On January 1, 20Y4, however, Xtreme Co. began offering credit on terms of n/30. The amount of the adjusting entry to record the estimated uncollectible receivables at the end of each year has been of 1% of credit sales, which is the rate reported as the average for the industry. Credit sales and the year-end credit balances in Allowance for Doubtful Accounts for the past four years are as follows: Allowance for Doubtful Accounts Year 20Y4 20Y5 20Y6 20Y7 Credit Sales $4,000,000 4,400,000 4,800,000 5,100,000 $5,000 8,250 10,200 14,400 (Continued)