Sandel Company reports the following financial information before adjustments.

Instructions Prepare the journal entry to record bad debt expense assuming Sandel Company estimates bad debts at

(a) 1% of net sales and

(b) 5% of accounts receivable.

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Dr. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances 160,000 Cr. 2,000 800,000 50,000