A bad debt recovery is a payment received after it has been designated as un-collectible. This may occur after legal action has been taken to recover a receivable, as a partial payment from a bankruptcy…

Percentage of Sales Method Example: The company estimates bad debt based on the percentage of sales method. Sales for the fiscal year ended December 31, 2013 were $3,400,000, while credit sales were $2,900,000. The company…