1

Sales on Credit 1,000,000.00

Less: Sales Return and Allowance (15,200.00)
Net Credit Sales 984,800.00
Multiply: Estimated as Uncollectible Percentage 1.50%
Bad Debt Expense 14,772.00

Journal Entry
31-Dec Bad Debt Expense 14,772.00
Allowance for Bad Debt 14,772.00

2
31-Dec Allowance for Bad Debts 12,000.00
Accounts Receivable 12,000.00

3
Net Recievables 180,000.00
Add: Allowance for Bad Debts 4,240.00
Gross Accounts Receivables 184,240.00
Multiply: Percentage 4%
Allowance for Doubtful Account 7,369.60

Journal Entry
31-Dec Allowance for Bad Debts 7,369.60
Accounts Receivable 7,369.60

4
31-Dec Cash 36,000.00
Loss on Factoring 4,000.00
Accounts Receivable 40,000.00