SP8-43 (similar to) Question Help Water Way Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing T-shirts. Many of these customers are asking for credit terms. Alison and Zion Wilson, stockholders and company managers, have decided it is time to review their business transactions and update some of their business practices. Their first step is to make decisions about handling accounts receivable. So far, year to date credit sales have been $14,000. A review of outstanding receivables resulted in the following aging schedule: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. The company wants to use the allowance method to estimate bad debts. Assume a zero beginning balance for Allowance for Bad Debts. a. Determine the estimated bad debts expense under the percent-of-sales methods at June 30, 2019. Assume that 7% of credit sales will not be collected. (Round to the nearest dollar.) Method Estimated Bad Debts a. Percent-of-sales 9800