Sonic Corp. runs the largest chain of drive-in restaurants in the United States. In its 2010 10 K, Sonic reported the following changes in the Allowance for Doubtful Accounts (in thousands):

Required:
1. Create a T-account for the Allowance for Doubtful Accounts and enter into it the amounts from the above schedule. Then write the T-account in equation format to prove that the above items account for the changes in the account.
2. Record summary journal entries related to (a) estimating bad debt expense, and (b) write offs of specific balances during the year.
3. If Sonic had written off an additional $20,000 of accounts receivable during the period, how would Net Receivables have been affected? How would Net Income have been affected?

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Balance at Beginning of Period $879 Charged to Bad Debt Expense $2,470 Amounts Written Off Balance at End of Period $139 $3,210