Allowance Method of Accounting for Bad Debts-Comparison of the Two Approaches Romere Corp had the following data avable for 2017 (before making any adjustments) Accounts receivable, 12/31/17 $329,300 Allowance for doubthul accounts 2.500 Net credit sales, 2017 794,000 Required: 1. contity and analyze the adjustment to recognize bad debts under the following assumptions: (a) batetits expense is expected to be one credit for the year. Activity Accounts Statements) How does this entry affect the accounting equation of financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, L., a decrease, be sure to enter the ans with minusson. Rememberita contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders' Liabilities Equity Revenues Expenses b) Romero expect it will not be able to collect 6% of the balance in accounts receivable at year-end Activity Sweats) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement mis negative, le, a decrease be sure to enter the answer with a mission Remember if a contra account is increased it will have the effect of decreasing the corresponding financial statement item Balance Sheet Income Statement Stockholders' Liabilities Equity Revenues Expenses 2. Assume instead that the balance in the allowance account is negative $2.000. How will this affect your answers to part (1) (a) todett e is expected to be of net credit for the year Acces How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, le, a decrease, be sure to enter the answer with a minus sign. Remember a contra account is increased it will have the effect of decreasing the corresponding financial statement item Balance Sheet Income Statement Stockholders Liabilities Equity Revenues (1) Rom e t witte ble to collect 6% of the balance accounts receivable at year-end Accounts Statement(s) a decrease be sure to enter the answer How does this entry affect the accounting equation? a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, with a minus sign. Remember of a contra account is increased, it will have the effect of decreasing the corresponding financial statement item Balance Sheet Stockholders' Income Statement Liabilities Equity Revenues Expenses