Part 2 Problem 2 Abby Ellen Company be associated with this years sales. Based on the past several years, the company tas averaged bad uses the income statement approach to calculate how much bad debts expense w ts expense of 1% of net credit sales. The following information is ponded: Net Credit S $80,000 57,000 Assume that there is a $100 credit balance in the Allowance for Doubtful Accounts from prior Allowance For 1. Prepare an adjusting entry to recored bad debts expense that is bssed on 8 percentage of net credit sales Date Dec L 31 2. Using the same information, assume the company uses the balance sheet approach and bases the new total Allowance for Doubtful Accounts on the current Accounts Receivable on the balance sheet Allowance For Bad Debts 100 The company prepares an Aging of Accounts Receivable schedule: 1-90 Over 90 1-80 870 10% Not Yet Due 1-30 Total 200 330 2,000 3,600 7,000 50% 20% 4% 3% collectible al Uncollectible Instructions: 1. Compute the Total Estimated Uncollectible Accounts 2. Prepare the adjusting entry to record bad debts expense for the end of period. Journal Entry Dec 31 Compute the net receivables based on the above information at the end of December