Recording estimated bad debts

Chekov Company uses the allowance method to account for bad debts. On December 31, 2021, the following information was available:

Net Sales $3,890,000

Accounts Receivable $1,240,000

Required:

In Workpaper #2, give the adjusting general journal entry required on December 31, 2021 to record estimated bad debts assuming:

1. Bad debts are estimated at 3% of net sales; the unadjusted balance of the Allowance for Bad Debts account is $26,500 credit.
2. Bad debts are estimated at 3% of net sales; the unadjusted balance of the Allowance for Bad Debts account is $30,300 debit.
3. Bad debts are estimated at 9% of accounts receivable; the unadjusted balance of the Allowance for Bad Debts account is $26,500 credit.
4. Bad debts are estimated at 9% of accounts receivable; the unadjusted balance of the Allowance for Bad Debts account is $30,300 debit.

Workpaper #2

Based on your journal entries, indicate the balances of the accounts that would be reported on the financial statements on December 31, 2021:

	On the Income Statement:		On the Balance Sheet:
CASE	Bad Debts Expense		Allowance for Bad Debts	Cash Realizable Value of Accounts Receivable
1
2
3
4

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Recording Estimated Bad Debts GENERAL JOURNAL Date Account Titles DR CR Case 1 Case 2 Case 3 Case 4