On December 31, 2005, Ethan Co. records show the following results for the calendar-year:

Required 1. Prepare the adjusting entry for Ethan Co. to recognize bad debts under each of the following in¬ dependent assumptions:

a. Bad debts are estimated to be 2% of credit sales.

b. Bad debts are estimated to be 1% of total sales.

c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31, 2005, balance sheet given the facts in part la.
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31, 2005, balance sheet given the facts in part 1 c.

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Cash sales Credit sales $1,803,750 3,534,000 In addition, its unadjusted trial balance includes the following items: Accounts receivable Allowance for doubtful accounts $1,070,100 debit 15,750 debit