2 A/R.BALANCE@ 12/31/2008 5,000,000 RESERVE FOR BAD DEBT IS 1% OF THE ENDING A/R BALANCE CASE 1 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008 MAKE THE REQUIRED ENTRIES TO SET UP THE RESERVE FOR EACH CASE 0 CASE 2 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008 40,000 CREDIT CASE 3 ALLOW FOR DOUBTFUL ACCTS BAL@ 12/31/2008 10,000 DEBIT 3 A COMPANY WENT BANKRUPT AND OWED $18,000 TO ABC MAKE THE ENTRY TO WRITE OFF THE$18,000 (USING THE ALLOWANCE METHOD)