The Tulip Company uses the percent of receivables method of accounting for uncollectible accounts receivable,and a perpetual inventory system.As of January 1,its net accounts receivable totaled $485,000 (Accounts Receivable $500,000 less a $15,000 Allowance for Doubtful Accounts).During the current year,the following transactions occurred.

Percent of Receivables Method

An accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on a percentage of the total accounts receivable.

Perpetual Inventory System

This is an accounting method that continuously updates inventory records for each sale or purchase of inventory.

Allowance for Doubtful Accounts

A contra-account that reduces the total receivables reported on the balance sheet to reflect the amount expected to be collected.