A trial balance before adjustment included the following:

Debit Credit

Accounts receivable 80,000

Allowance for doubtful accounts 730

Sales 340,000

Sales returns and allowances 8,000

a) Give journal entries assuming that the estimate of uncollectible is determined by taking 5% of gross accounts receivable.

Explain your answer

b) Give journal entries assuming that the estimate of uncollectible is determined by taking 4% of gross accounts receivable and the allowance for doubtful accounts has a debit balance of 1,000.

Explain your answer