Determine the estimated bad debts expense under the percent of sales methods at June 30, 2025

ams Better Boat Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers ronting canoes and purchasing T-shirts Many of these customers are asking for credit terms. Amy and Zous Wilson, stockholders and company managers, have decided it is time to review their business transactions and update some of their business practices. Their first step is to make decisions about handing accounts receivable. So far, year to date credit sales have been $22,000 A review of outstanding receivables resulted in the following aging schedule: (Click the icon to view the aging schedule) Requirement 1. The company wants to use the allowance method to estimate bad debts, Assume a zero beginning balance for Allowance for Bad Debts. a. Determine the estimated bad debts expense under the percent-of-sales methods at June 30, 2025. Assume that 7% of credit sales will not be collected (Round to the Data table Customer Name Valley Kids Club Tee Time Morning Dew Daycare Age of Accounts as of June 30, 2025 Over 90 1-30 Days 31-60 Days 61-90 Days Days $ 200 700 $ 800 $ Print Done 700 Total Balance $ 200 1,500 700 Data table Bayside Pavilion Hope Center North Yacht Club Oak Shirts Zoe's Marina 1,000 1,200 1,100 100 Print 800 100 Done 1,300 100 1,000 1,300 1,200 1,900 300 - Data table Hope Center North Yacht Club Oak Shirts Zoe's Marina Total 1,200 1,100 100 4,300 $ Print 800 100 1,700 $ Done 1,300 100 1,400 $ 700 $ 1,300 1,200 1,900 300 8,100 - X Better Boat Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing CHE Requirement 1. The company wants to use the allowance method to estimate bad debts. Assume a zero beginning balance for Allowance for Bad Debts. a. Determine the estimated bad debts expense under the percent-of-sales methods at June 30, 2025. Assume that 7% of credit sales will not be collected. (Round to the nearest dollar) Method Estimated Bad Debts a Percent-of-sales