Using the numbers as written in the corresponding question, you would subtract 20,000 from 100,000 to get your amount of net profit. The 100k and the 20k are original sales figures, with the 100 being total sales and the 20 being sales returns. After subtracting the total returns you are left with net profit of 80k. You would then multiply the 80k by 1% to get your amount for bad debts. The total would be $800 of bad debt expenses (debts)..
