Duncan Company reports the following financial information before adjustments.

Instructions
Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at
(a) 1% of net sales and
(b) 5% of accounts receivable.

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Dr. Cr. Accounts Receivable Allowance for Doubtful Accounts Sales (all on credit) Sales Returns and Allowances $100,000 $ 2,000 900,000 50,000