Reference no: EM132820865

Question - At December 31 of the current year, a company reported the following:

Total sales for the current year: $780,000.00 includes $160,000.00 in cash sales.

Accounts receivable balance at Dec. 31, current year: $190,000.00.

Bad debts written off during the current year: $6,800.00.

Balance of Allowance for Doubtful Accounts at January 1, current year: $8,300.00.

Make the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal:

(a) 1.5% of credit sales.

(b) 5% of accounts receivable.