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15 August, 19:16

Sully Corporation uses a percentage-of-credit sales method for accounting for bad debt expense. Sully estimates that 2% of sales will eventually become uncollectible. If Sully has $100,000 of credit sales during the year, the adjustment for estimated uncollectible accounts will require a

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  1. 15 August, 21:03
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    The adjusting entry is as follows

    Bad debt expense A/c Dr $2,000

    To Allowance for uncollected accounts A/c $2,000

    (Being bad debt expense is recorded)

    The computation of the bad debt expense is shown below:

    = Credit sales * estimated percentage given

    = $100,000 * 2%

    = $2,000

    Since the percentage of credit sales method is used so we multiplied the credit sales with the estimated given percentage so that the estimated uncollected amount could come
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