eBook Calculator Cornerstone Exercise 5-29 (Algorithmic) Percentage of Credit Sa

Question

eBook Calculator Cornerstone Exercise 5-29 (Algorithmic) Percentage of Credit Sales Method At December 31, 2019, Garner has a $10,000 credit balance in its allowance for doubtful accounts. Garner estimates that 3% of its 2019 credit sales will eventually default. During 2019, Garner had credit sales of $1,160,000. Required Estimate the bad debt expense under the percentage of credit sales method. Feedback Y Check My Work The percentage of credit sales method attempts to estimate the ending balance in Bad Debt Expense by forming estimates based on past experience with uncollectible accounts 12:38 PM 7/2/2018

Explanation / Answer

Bad debt expense                 24,800.00 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Credit Sales           1,160,000.00 Allowance as %of credit sales 3% Allowance required = 1160,000*3%                 34,800.00 Existing credit balance                 10,000.00 More Allowance required                 24,800.00 Entry would be Dr Cr Bad Debt expense DR                 24,800.00 To Allowance for doubtful accounts           24,800.00

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