A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is
$3,500.

Question

Quizplus · Accepted Answer

The calculation for the estimated bad debts expense using the percentage of sales method is:
Sales x Percentage estimated as uncollectible = Bad debts expense
$350,000 x 1.0% = $3,500
Therefore, the estimated amount of bad debts expense is $3,500.

A Company Using the Percentage of Sales Method for Estimating