E9-2 Using the allowance method for bad debts (percentage of sales) [15 min] At 30 September, Kangaroo Island Flagpoles had Accounts receivable of $28000 and Allowance for doubtful debts of $1000. During October, Kangaroo Island recorded: a sales of $180 000 ($160000 on credit; $20000 for cash) b collections on account, $130000 C bad debt expense, estimated as 2% of credit sales d write-offs of bad debts, $2400. Requirements 1 Journalise sales, collections and bad debt expense by the allowance method (percentage of sales method) and write-offs of bad debts during October. 2 Prepare T-accounts to show the ending balances in Accounts receivable and Allowance for doubtful debts. Calculate net accounts receivable at 31 October. How much does Kangaroo Island expect to collect