Example of % of sales Method Estimating Allowance amount

Homelert Estimating the Allowance Amount...C9 1. Example of \% of Sales Method of Estimating Allowance amount On December 31, Alvare Company estimates its bad debts to be ..5\% of its annual credit sales of $875,000. They use the allowance method. Prepare the journal entries for December 31 recording the Bad Debt Expense and Allowance. 2. Example of % of Accounts Receivable Method of Estimating Allowance amount Cabool Supply uses the percent of accounts receivable method to estimate bad debts. On December 31 , there are outstanding accounts receivable of $53,000. The estimate is that 4% of these will be uncollectible. Prepare the entry to record the bad debt expense under the allowance method. There is a $915 credit balance in the account already. 3. Example of Aging of Accounts Receivable Method for Estimating. Allowance amount Hector Company has the following estimates based on aging of receivables: A) Determine the estimate for the Allowance Acct B) Prepare the entry if there is a $600 credit in the Allowance account already