At December 31, Bowie Company reports the following results for its calendar-year.
Cash sales . . . . . . . . . . . . . $400,000
Credit sales . . . . . . . . . . . . 300,000
Its year-end unadjusted trial balance includes the following items.
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . $65,000 debit
Allowance for doubtful accounts . . . . . . . . . . . . 1,000 debit
a. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 2% of credit sales.
b. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1% of total sales.
c. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 8% of year-end accounts receivable.