Problem 1 Instructions: Use the the information below to answer the questions. Unadjusted Trial Balance Cr. Dr. $400,000 Accounts receivable Allowance for doubtful accounts Sales (all on credit) Sales returns and allowances $7,000 1,600,000 74,000 Questions 1. Prepare a journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 4% of gross accounts receivable. Show your calculations. Answer: 2. Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of $4,000 instead of a credit balance. How will this difference affect the journal entry in Part 1? Explain your