Jefferson uses the percent of sales method of estimating uncollectible expenses. based on past history, 2% of credit sales are expected to be uncollectible. sales for the current year are $5,550,000. which of the following is correct regarding the entry to record estimated uncollectible receivables? a. accounts receivable will be debited b. allowance for doubtful accounts will be credited c. bad debt expense will be credited d. cash will be debited

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?