Problem # 6 120 points) The December 31, 2012 balance sheet of Sauron Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. During 2012, the following transactions occurred 1) sales on account $1,500,000 .2) sales returns and allowances, $50,000; 3) collections from customers, $1,250,000 4) accounts written off amounted to $36,000; 5) Previously written off accounts of $6,000 were collected. Instructions (A) Prepare the necessary journal entries for the 2012 transactions. (B) If the company uses the percentage of net sales basis to estimate bad debts expense and anticipates 3% of the 2012 netsales to be uncollectible, what is the adiusting entry at December 31, 2012? (C) If the company uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 8% of accounts receivable, what is the adjusting entry at December 31, 2012 if the accounts receivable acceunt had an adjusted balance of $564,000 and the allowance for doubtful accounts had a credit balance of $2.000 Solution to Problem #6 A 1)