Chipman Sofware recently reported the following amounts in its unadjusted trial balance at its year-end:

	Debits	Credits
Accounts Receivable	$ 3,000
Allowance for Doubtful Accounts		$ 20
Sales (assume all on credit)		44,000

Required:

1. Prepare the adjusting journal entry required for the year. Assume Chipman uses ¹/₄ of 1 percent of sales to estimate its Bad Debt Expense for the year and no Bad Debt Expense has been recorded yet.
2. Prepare the adjusting journal entry required for the year. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $80 of its Accounts Receivable will be uncollectible.
3. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $80 of its Accounts Receivable will be uncollectible. Prepare the year-end adjusting journal entry for recording Bad Debt Expense. Assume Chipman's year-end unadjusted balance in Allowance for Doubtful Accounts was a debit balance of $20.
4. If one of Chipman's main customers declared bankruptcy after year-end, what journal entry would be used to write off its $15 balance?

A. Record the entry for bad debt expenses under the percentage of credit sales method.

B. Record the entry for bad debt expenses under the aging of accounts receivable method.

C. Record the adjusting entry for bad debts, using the aging of accounts receivable method.

D. Record the write-off certain customer account which is not collectible due to bankruptcy declared by the customer totaling $15.