I had a question for problem 3 of 7-2 (I gave the solution below too). If the problem gives 4% of gross AR as the allowance amount, why don't you deduct net credit sales from the allowance amount calculated at 12/31 (52K as per solution sheet) and multiply by 4% to arrive at allowance? Or is that 4 just a distraction?

3. Shore Co. provides for doubtful accounts based on 4% of gross accounts receivable, The following data are available for 2017. Credit sales during 2017 Bad debt expense Allowance for doubtful accounts 1/1/17 Collection of accounts written off in prior years (customer credit was reestablished) Customer accounts written off as uncollectible during 2017 S4,400,000 57,000 17,000 8,000 30,000 3. Allowance for doubtful accounts 1/1/17............. $17,000 8,000 (30,000) Establishment of accounts written off in prior years........ Customer accounts written off in 2017........................ Bad debt expense for 2017 57 000 Allowance for doubtful accounts 12/31/17........... $52,000