Bad debt expense info: allowance for doubtful accounts has a credit balance of $1,000. credit sales are $500,000. cash sales are $500,000. percentage of sales method is based on 5% of net credit sales. aging schedule shows that $25,000 is uncollectible. accounts receivable $200,000.journalize adjusting entry--using percentage of sales methood.

(DR) Bad Debt Expense $25,000;

(CR) Allowance for Doubtful Accounts $25,000

Explanation:

In percentage of sales method, the balance in the allowance for doubtful debts is ignored.

Just simply multiply the Credit Sales amount of $500,000 by the Sales Method rate of 5% and you'll get $25,000 with this adjusting entry:

(DR) Bad Debt Expense                              $25,000

(CR)         Allowance for Doubtful Accounts            $25,000

answer; /// i do believe the correct answer is (possession utility);