My sales are very bad, what should I do?

How do i calculate this problem bad debt is 2% net credit sales what is bad debt expenses, the % of net credit?

• sales method is used to estimate bad debts what is the balance of the allowance for Doubtful accounts after the adjustments for bad debts? Sales (100% on credit) 950,000 Sales Return & Allowances 21,000 Accounts Receivables 114,000 Allowance for Doubtful Accounts (before adjustments at December 31: Credit balance) 1,000

• Answer:

  The balance for Allowance for Doubtful Accounts is calculated by taking 2% of net sales. The bad debt expense is the amount needed to adjust the current balance to that calculated amount. With the data you've been given, you need to calculate net credit sales, then multiply that amount by 2% to calculate the ending allowance required, then compare that to the current balance to get the bad debt expense. Net credit sales = 950,000 sales - 21,000 returns = 929,000 Allowance required = 929,000 net sales x 2% = 18,580 Bad debt expense = 18,5800 req'd balance - 1,000 current = 17,580 So bad debt expense is 17,580