Reference no: EM132693753

A trial balance for the ABC Company shows the following:

Accounts Receivable 600,000

Allowance for Bad Debts 5,000

Sales 4,030,000

Sales Returns and allowances 30,000

Problem 1: Give the adjustments for estimated bad debts assuming that:

1. A loss of 30,000 is indicated by aging the accounts
2. The allowance amount is to be increased by 1% of Net Sales
3. It is estimated that bad debts for the period is 3% of Net Sales
4. The allowance account is maintained at 3% of accounts receivable
5. The allowance account is increased to 5% of accounts receivable.