When the bad debt estimate is based on the assumption that the amount of bad debt is a function of the total sales made on credit, this method is known as O the direct writeoff method. O the percentage receivables method. O the percentage of credit sales method. O aging of accounts receivable method. Bailey Inc.'s books revealed the following data for 2020 after all adjustments were made: Cash sales $825.000 Sales returns (on credit sales) 35,000 Allowance for doubtful accounts (credit 3.800 balance) Credit sales 575.000 Accounts receivable 168.000 Bailey estimates bad debt expense based on 2% of net credit sales. The bad debt expense for 2020 was O $10.800. O $11.500. O $14,600. O $3.360. Leau Ltd's bank loan includes covenants related to minimum current and quick ratios that the company must maintain. The covenants state that the company must maintain a current ratio of 1.40 or more, and a quick ratio of 0.59 or more. How would a $77,500 loan, which would be repayable in three years, affect your analysis? (Round answer to 2 decimal places, eg. 15.25.) Quick ratio The company meet its target. The contra-asset account used to provide for an estimate of uncollectible accounts is O Bad Debt Expense. O Allowable Accounts Receivable. O Allowance for Doubtful Accounts. O A/R subledger