2. At December 31, 2017, the trial balance of XYZ Company contained the following amounts before adjustment Debit Credit Accounts Receivable $385,000 Allowance for Doubtful Accounts S 1,000 Sales Revenue 970,000 Instructions a) Based on the information given, which method of accounting for bad debts is XYZ Company using the direct write-off method or the allowance method? How can you tell? b) Prepare the adjusting entry at December 31, 2017, for bad debt expense under each of the following independent assumptions: 1. An aging schedule indicates that $11,750 of accounts receivable will be uncollectible. 2. The company estimates that 1% of sales will be uncollectible. c) Repeat part (b) assuming that instead of a credit balance there is a $1,000 debit balance in Allowance for Doubtful Accounts. d) During the next period, January 2018, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write- off. e) What type of account is Allowance for Doubtful Accounts? How does it affect accounts receivable and how it is reported on the balance sheet at the end of the accounting period