Adjusting Entry?

Question

Need to make adjusting entry. Bad debts are estimated to be 8% of total [u]net credit sales[u] (do not include rentals). I was taking number from sales journal (Sales Cr) but was told by instructor that was wrong. Which journal should I be looking at or should I look in ledger? Any help would be appreciated. Thanks.

Answer 1

The sales figures would be posted gross monthly from the sales journal to the sales account in the general ledger. I don't know how you're taught to post the sales returns and sales discounts, but they should be net off gross sales to arrive at net sales before you calculate your 8%. Remember to take only credit sales, and don't include cash sales.