Sandhill Company reports the following financial information before adjustments. Dr. Cr. Accounts Receivable $132,500 Allowance for Doubtful Accounts $3,970 Sales Revenue (all on credit) 838,100 Sales Returns and Allowances 50,780 Prepare the journal entry to record bad debt expense assuming Sandhill Company estimates bad debts at (a) 5% of accounts receivable and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,630 debit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

S/n  Accounts title                                        Debit      Credit

a.      Bad Debt expenses                          $2,655

                Allowance for Doubtful debts                    $2,655

                ((132,500*5%)-3,970)

        (Being bad debt expense recorded)  

b.       Bad Debt expenses                           $8,255

                  Allowance for Doubtful debts                   $8,255

                   {(132,500*5%)+1,630]

         (Being bad debt expense recorded)

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"

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