The Barron Company Uses the Percent of Sales Method of Accounting

Essay

The Barron Company uses the percent of sales method of accounting for uncollectible accounts. Barron Company estimates that 1% of its $2,900,000 of credit sales will be uncollectible. If the balance of the allowance for doubtful accounts was a $4,000 credit before adjustment at the end of the year, prepare the adjusting entry Barron must record.