a. Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 7% of gross accounts receivable.

b. Assume that all the information is the same, expect that the Allowance for Doubtful Accounts has a debit balance of $4,700 instead of a credit balance. How will this difference affect the journal entry in part a?

The trial balance before adjustment of Sunland Company reports the following balances