At December 31, 2011, Ethan Company Reports the following results for its calendar-year.

Cash Sales $1,803,750

Credit Sales 3,534,000

In addition, its unadjusted trail balance includes the following items.

Accounts receivable $ 1,070,100 debit

Allowance for doubtful accounts 15,750 debit

1.Prepare the adjusting entry for this company to recognize bad debits under each of the following independent assumptions.

A.Bad debts are estimated to be 2% of credit sales.

B.Bad debts are estimated to be 1% of total sales.

C.An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.

2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2011, balance sheet given the facts in part 1a.

3.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2011, balance sheet given the facts in part 1c.