3. Company T makes most of its sales on account. In their most recent fiscal year, the company recorded sales of $2,230,000; during the year, they wrote off customer accounts in the amount of $47,000 as uncollectible. At the beginning of the year, the balance in Allowance for Doubtful Accounts was a credit of $50,000. At year-end, the balance in Accounts Receivable was $720,000.

Required. Use tab P 3 in the spreadsheet:

a. Assume that T uses the percentage of sales method to estimate bad debts and that their experience indicates that 1.1% of sales will turn out to be uncollectible. Prepare the adjusting entry to record bad debts.

b. As a separate case, assume that T uses the percentage of receivables method and that they estimate 2.5% of outstanding receivables will become uncollectible. Prepare the adjusting entry in this case.