Allowance Method of Accounting for Bad Debts--Comparison of the Two Approaches Kandel Company had the following data available for 2017 (before making any adjustments): Accounts receivable, 12/31/17 $317,600 Allowance for doubtful accounts 2,600 Net credit sales, 2017 762,000 Required: 1. Identify and analyze the adjustment to recognize bad debts under the following assumptions: (a) bad debts expense is expected to be 2% of net credit sales for the year. Activity Operating Allowance for Doubtful Accounts Increase, Bad Debts Expense Increase Statement(s) Balance Sheet and Income Statement Accounts