Given the information presented in Figure 13.13, do the following:

a. Prepare on December 31, 2015, the adjusting journal entry for Bad Debts Expense. Balances: Cash, $25,000; Accounts Receivable, $173,000; Allowance for Doubtful Accounts, $300; Merchandise Inventory, $10,000.

b. Prepare a partial balance sheet on December 31, 2015, showing how net realizable value is calculated.

c. If the balance in the Allowance for Doubtful Accounts were a $300 debit balance, journalize the adjusting entry for Bad Debts Expense on December 31, 2015.

HAPPY CO. DECEMBER 31, 2015 Est imated Percent Considered to Be Bad Debts Expense 396 996 18% 6% Estimated Amount Needed in Allowance for Doubtful Accounts Amount Not yet due 0-60 61-180 $150,000 10,000 9,000 4,000 $173,000