Need to make adjusting entry. Bad debts are estimated to be 8% of total [U]net credit sales[U] (do not include rentals). I was taking number from sales journal (Sales Cr) but was told by instructor that was wrong. Which journal should I be looking at or should I look in ledger? Where do I find the net credit sales? Do I take it from sales in worksheet? Any help would be appreciated. Thanks.

Well According To What Your Saying You Supossed To Make An Adjustment If You Have A Balnce In Hte Account Alredy You Need To Make Anjusting Where You Debit Bad Expense For The Difference And Credit Allowence For Doutful Accounts

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Originally Posted by capemay60

Need to make adjusting entry. Bad debts are estimated to be 8% of total [U]net credit sales[U] (do not include rentals). I was taking number from sales journal (Sales Cr) but was told by instructor that was wrong. Which journal should I be looking at or should I look in ledger? Where do I find the net credit sales? Do I take it from sales in worksheet? Any help would be appreciated. Thanks.

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OK, I think that you are supposed to take the numbers from your accounts receivable account (you only need to calculated the receivables for credit sales, because for what you wrote you might also have receivables for rentals) after you know what amount from your accounts receivables balance is from credit sales you multibly that by 8% and it will give you what the balance for your allowance for doubtful accounts should be, and then do the necessary adjustments. to calculate the bad debts expense