Pick a Method $(10$ points$)$

Choose one: Percentage of Sales, Percentage of Receivables, or Aging of Accounts

Briefly explain how your method works.

Do the Math $(35$ points$)$

Use the data below to calculate bad debt using your method:

Total Credit Sales: $$500,000$

Accounts Receivable: $$120,000$

Aging Schedule:

Current: $$60,0002\%$

$31-60$ Days: $$40,0005\%$

Over $60$ Days: $$20,00012\%$

Then:

Show your bad debt calculation

Record the adjusting journal entry

Please use the Percent of Sales method