Percentage of credit sales method: It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible based on the total amount of credit sales for a specific period. This method is otherwise known as income statement method. To determine: The adjustment of Incorporation B for allowance for uncollectible accounts using the percentage of credit sales method.

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Chapter 5, Problem 5.17BE

To determine

Percentage of credit sales method:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible based on the total amount of credit sales for a specific period. This method is otherwise known as income statement method.

To determine: The adjustment of Incorporation B for allowance for uncollectible accounts using the percentage of credit sales method.

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