E7 7 (Recording Bad Debts) Sandel Company reports the following financial information before adjustments.
|
Dr. |
Cr. |
|
|
Accounts Receivable |
$160,000 |
|
|
Allowance for Doubtful Accounts |
$ 2,000 |
|
|
Sales Revenue (all on credit) |
800,000 |
|
|
Sales Returns and Allowances |
50,000 |
Instructions
Prepare the journal entry to record bad debt expense assuming Sandel Company estimates bad debts at
(a) 1% of net sales and
(b) 5% of accounts receivable.