E7-9 (L03) (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Taylor Swift Inc.
shows the following balances.
Dr. Cr.
Accounts Receivable $90,000 Allowance for Doubtful Accounts 1,750 Sales Revenue (all on credit) $680,000 Instructions Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of

(a) 4% of gross accounts receivable and

(b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,700 credit balance.