Aaron Autobodyshowed the following partial unadjusted results at October 31, 2020, its year-end:

AccountDebitCreditSales$1,710,000Accounts receivable$154,000Allowance for doubtful accounts3,200

Part 1

a.Assuming Aaron estimates bad debts to be 1.5% of sales, prepare the adjusting entry at October 31, 2020.

b.Show how accounts receivable would be shown on the October 31, 2020, balance sheet using your calculations in (a).

Part 2

c.Instead of (a), assume that Aaron estimates bad debts to be 5% of outstanding accounts receivable. Prepare the adjusting entry at October 31, 2020.

d.Show how accounts receivable would be shown on the October 31, 2020, balance sheet using your calculations in (c).