ESTIMATING BAD DEBTS EXPENSE: Percent of Sales Method: Assume that A Company has credit sales of $400,000 in the year. Based on past experience, they estimate 0.6% of credit sales to be uncollectible. Record the journal entry necessary. Dr. Cr. Accounts Receivable Methods: (1) Percent of Accounts Receivable Method: Assume that B Company has $50,000 of outstanding accounts receivable at year end. Past experience suggests 5% of outstanding receivables are uncollectible. The Allowance for Doubtful Accounts currently has a $200 credit balance. Record the joumal entry necessary. Dr. Cr. (2) Aging of Accounts Receivable Method: Given the following schedule of accounts receivable by age: Customer Totals % uncollectible Est. uncollectible Not Yet Totals Due 1 to 30 Days Past Due 31 to 60 Days Past Due 61 to 90 Days Past Due Over 90 Days Past Due 49,900 37,000 6,500 3,500 1,900 1,000 2% 5% 10% 25% 40% 2,290 740 325 350 475 400 The Allowance for Doubtful Accounts currently has a $200 credit balance. Record the needed entry. Dr. Cr. What if instead the Allowance for Doubtful Accounts had a $500 debit balance before adjustment. Record the entry. Dr. Cr.