More Info 2013 Dec. 31 Estimated that bad debts expense for the year was 2% of credit sales of $430,000 and recorded that amount as expense. The company uses the allowance method. 31 Made the closing entry for bad debts expense. 2014 Jan. 17 Sold inventory to Mack Smith, $400, on account. Ignore cost of goods sold. Jun. 29 Wrote off Mack Smith's account as uncollectible after repeated efforts to collect from Aug. 6 Received $400 from Mack Smith, along with a letter apologizing for being so late. Reinstated Smith's account in full and recorded the cash receipt. Dec. 31 Made a compound entry to write off the following accounts as uncollectible Barry Krisp, $1,900, May Milford, 1,000 and Richard Ren k, $500 31 Estimated that bad debts expense for the year was 2% on credit sales of $470,000 and recorded the expense. 31 Made the closing entry for bad debts expense