Exercises Comparison of the Two Approaches Exercise 7-2 Allowance Method of Accounting for Bad Debts- Kandel Company had the following data available for 2017 (before making any adjustments): Accounts receivable, 12/31/17 $320,100 Allowance for doubtful accounts 2,600 Net credit sales, 2017 834,000 Required 1. Identify and analyze the adjustment to recognize bad debts under the following assumptions: (a) bad debts expense is expected to be 2% of net credit sales for the year and (b) Kandel expects it will not be able to collect 6% of the balance in accounts receivable at year-end. 2. Assume instead that the balance in the allowance account is a negative $2,600. How will this affect your answers to part (1)