5. Assume that a corporation uses the allowance method of recording bad debts. At the end of year 20x4 (before recording any adjusting or closing entries), the corporation reports balances in selected general ledger accounts as set out below. Accounts Receivable $400,000 dr Allowance for Bad Debts 2,000 dr Bad Debts Expense 0 Assume that the corporation uses the ageing of accounts receivable approach to determine the amount of its bad debt expense for the year and that an end-of-year analysis of the various individual accounts receivable balances leads to a conclusion that $17,000 (out of the $400,000 total) of the accounts receivable will ultimately be uncollectible. To record bad debts expense for the year, the corporation should ... A. Debit Bad Debts Expense for $17,000 B. Debit Allowance for Bad Debts for $19,000 C. Debit Bad Debts Expense for $15,000 D. Credit Allowance for Bad Debts for $19,000 E. None of the above 6. Assume that a corporation uses the allowance method of recording bad debts. On May 2, 20x5, the corporation learns that the bankruptcy court has ruled that bankrupt and no longer owes $1,200 to the corporation. To write off Ben Baker's account receivable, the corporation should ... A. Debit Bad Debts Expense for $1,200 B. Debit Accounts Receivable for $1,200 Debit Allowance for Bad Debts for $1,200 D Credit Allowance for Bad Debts for $1,200 None of the above 7. Assume that a corporation uses the allowance method of recording bad debts. At the end of year 20x1 (before recording any adjusting or closing entries), the corporation reports balances in selected general ledger accounts as set out below. Accounts Receivable $500,000 dr Allowance for Bad Debts 1,000 cr Bad Debts Expense 0 Assume that the corporation uses the percentage of credit sales method to determine the amount of its bad debt expense for each year and that it considers the bad debt expense each year to be equal to 3% of credit sales made during the year. Assume also that the corporation reported total credit sales of $700,000 during 20x1. To record bad debts expense for the year, the corporation should ... A. Debit Bad Debts Expense for $21,000 B. Debit Bad Debts Expense for $22,000 C. Credit Accounts Receivable for $20,000 D. Debit Bad Debts Expense for $20,000 E. None of the above