Eaton Company uses the allowance method of estimating expenses due
Eaton Company uses the allowance method of estimating expenses due to bad debts. On December 31, before any adjustments have been recorded, the ledger contains the following balances:
Sales ................. $ 160,000
Sales Returns and Allowances ....... 34,000
The company estimates that bad debts expense will be 1 percent of net sales. Journalize the adjusting entry to record the estimated Bad Debts Expense. The Allowance for Doubtful Accounts account has a credit balance of $ 450.

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