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A Company Using the Percentage of Sales Method for Estimating

question 125

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A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible.The unadjusted balance in Allowance for Doubtful Accounts is a $500 credit.The estimated amount of bad debts expense is $3,000.


Definitions:

Materials Requisitioned

The act of asking for and taking out items from stock for the purpose of manufacturing or utilization.

Raw Materials Issued

The total raw materials moved from inventory for use in production.

Labor Time Tickets

Documents used to track the amount of time an employee spends on different tasks, facilitating accurate labor cost allocation.

Supervision

The act of overseeing work performance and activities to ensure that goals are met and policies are followed.

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