Problem 5 Selected accounts for Floor Products Co. are as follows: 100 Cash 105 Accounts Receivable 106 Allowance for Doubtful Accounts 300 Common Stock 400 Sales Revenue 540 Bad Debts Expense The company uses the Percentage of Receivables to estimate bad debts. At the end of the year, before adjusting entries, there is a $4,000,000 balance in Accounts Receivable and a $6,000 credit balance in Allowance for Doubtful Accounts. The company estimates 6% of its accounts receivable will become uncollectible. a. What amount does Floor Products Co. expect to become uncollectible? SHOW YOUR WORK. Do Not Abbreviate. b. Prepare the 12/31 adjusting entry to record estimated bad debts expense. SHOW YOUR WORK. Account Title Debit Credit c. In February, Floor Products Co. authorizes a $5,000 write-off of Suzy Que Co's account. Record the write-off. Account Title Debit Credit d. Indicate the effect the above transactions, b &c, will have on Net income and the corresponding dollar amount. If there is no effect, Indicate $0. Effect $ Amount Increase Net Income Decrease Net Income No Effect