Ramsey Company uses the percentage-of-sales basis for determining the allowance for doubtful accounts. Managem?

[MOMMY TO BE]

Ramsey Company uses the percentage-of-sales basis for determining the allowance for doubtful accounts. Management estimates that 1% of net credit sales will become uncollectible. Credit sales are $500,000, sales returns and allowances for credit sales are $25,000, and the allowance for doubtful accounts has a $1,000 credit balance.