Quagmire Company is preparing its financial statement for the year ended December 31,2011. A summary of Quagmire€™s accounts receivable sub-ledger shows die following information:

Required:
a. Determine the amount of bad debts expense required for 2011.
b. Show the journal entry to record bad debts expense for 2011.
c. Show the journal entry that was used to record write-offs for 2011.
d. Independent of the information above, suppose Quagmire factored $2,000,000 of receivables without recourse. In exchange, it received $1,900,000. Show the journal entry to record this transfer of receivables.
e. In part (d), suppose Quagmire instead factored the $2,000,000 of receivables with recourse and received $1,930,000 cash. Both Quagmire and the factor anticipate that 2% of these receivables will prove to be uncollectible, so the factor has held this amount to cover any uncollectible accounts. Should the amount of uncollectible prove to be more or less than 2%, the difference will be paid by/refunded to Quagmire. Show the journal entry to record this transfer of receivables.

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Days ourstanding from invoice date 31-90 days 90 daysTotal 0-30 days $7,100,000 $1,800,000 375,000 $9,275,000 Balance outstanding Dec. 31, 2011 Estimated default rate Accounts written off during 2011 Collections on accounts written off Allowance for uncollectibles, Jan. 1, 2011 0.5% 2% 10% 70,000 3,000 120,000