Prepare t-accounts for cash, A/R, the Allowance for DA, Income statement Prepare journal entries for each situtation Post to t-accounts Find Net Accounts receivable for each. 1. A company begins business on 1/1/Year A Information for January Credit sales 100,000 Cash collections 80,000 3. Bad debt expense is 3% of credit sales using the e using the percentage of sales method (total credit sales x estimate percentage) No accounts were written off. 1 At the end of January, the company reviews A/R and decides 2 that $4000 of ending A/R will NOT be collectable. 3 (make the adjusting entry needed to create this allowance balance.)