7 Q 6

At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $69,500, and it estimates that 2% will be uncollectible Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has: (a)a $1,182 credit balance before the adjustment. (b) a $348 debit balance before the adjustment