| Total Credit Sales |
| – Sales Returns and Allowances |
| – Sales Discounts |
| Net Credit Sales |
| Ending Allowance for Bad Debts = Ending A/R * Estimated % |
| (Balance Sheet Method) |
| Bad Debt Expense = Net Credit Sales * Estimated % |
| (Income Statement Method) |
| Accounts Receivable |
| – Allowance for Bad Debts (or Allowance for Uncollectible Accounts) |
| Net Realizable Value (or Net Accounts Receivable) |
| Face Value |
| * Annual Percentage Rate |
| * (Months Outstanding / 12) You could use (Days Outstanding / 360) instead of months |
| Interest Expense (or Revenue) |
| Maturity Value = Principal + Interest |