UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF SALES; NET REALIZABLE VALUE
McAllister's Framing and Art Supplies uses the percentage of sales method of accounting for uncollectible accounts. At the end of 20-9, Sue McAllister estimates that uncollectible accounts associated with this year's sales will be approximately $3,500. The balances in related accounts just prior to entering adjusting entries are listed below. Prepare the appropriate adjusting entry on December 31, 20-9, and compute net realizable value.
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Accounts Receivable
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Debit
28,000
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Credit
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Allowance for Doubtful Accounts
Bad Debt Expense
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-0-
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300
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