Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 3% of credit sales. b. Bad debts are estimated to be 2% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2015). (Round your final answers to the nearest whole dollar.)
| Cash sales | $ | 1,602,560 | |
| Credit sales | 3,220,000 | ||
| In addition, its unadjusted trial balance includes the following items. |
| Accounts receivable | $ | 975,660 | debit |
| Allowance for doubtful accounts | 23,140 | debit | |
Adjusting entry :
| No | accounts & explanaton | debit | credit |
| A | Bad debt expense (3220000*3%) | 96600 | |
| Allowance for doubtful accounts | 96600 | ||
| (To record adjusting entry) | |||
| Bad debt expense (4822560*2%) | 96451.20 | ||
| Allowance for doubtful accounts | 96451.20 | ||
| (To record adjusting entry) | |||
| Bad debt expense (975660*6%+23140) | 81679.60 | ||
| Allowance for doubtful accounts | 81679.60 | ||
| (To record adjusting entry) | |||
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