16. A widget manufacturing company failed to collect an average of 3 percent of its sales on credit In the previous fiscal year and it uses that percentage to estimate its bad debt expense for the current year. The company utilizes the percentage of credit sales method to make this estimate. If the company had $160,000 worth of credit sales for the month of April, what should the company record as its adjustment to "Allowance for Doubtful Accounts" on its balance sheet for the month of April? (A) A credit of $400. (B) A debit of $400. (C) A credit of $4,800. (D) A debit of $4,800. (E) None of the above, the company should only adjust its "Allowance for Doubtful Accounts on its income statement at the end of the fiscal year. Question 17. Pear Corp. had net income of $1,500,000 for the accounting period ended April 30. If Pear Corp.'s effective income tax rate is 25 percent, what should be its April 30 closing journal entry for "Income Tax Expense" to the "Profit and Loss" holding account? (A) A debit of $31,250 (B) A credit of $31,250 (C) A debit of $375,000 (D) A credit of $375,000 (E) None of the above, no closing journal entry should be made for "Income Tax Expense