Journal entries for the allowance method. Data related to sales on accounts of Health Company for its first three year of operations, 2006-2008 appear next:

Heath Company estimates that 3% of sales on account will ultimately become uncollectible. Uncollectible accounts generally occur within three years of the year of sale.
a. Prepare journal entries to recognize bad debt expense and to wirte-off uncollectible accounts for 2006, 2007, and 2008 using the allowance method.
b. Does 3% of sales on account appear to be a reasonable rate for estimating uncollectible for HeathCompany?

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Accounts Written Off as Uncollectible in Year Sales on Account 2007 2008 2009 Year 2006. 2006 Total 2010 $ 340,000 450,000 $1,800 $5,800 $ 3,000 2,500 $10,600 14,100 8,200 $ 3,400 2007 2008. 12,700 $8,300 $14,100 $16,100 580,000 2,900 $3,300 17,900 $1,800 $3,300 $1,370,000 $42,600