Application Problem 6-10 The trial balance of M&D Inc. shows a $64,000 outstanding balance in Accounts Receivable at the end of the first year of operations, December 31, 2015. During the fiscal year, 75% of the total credit sales were collected and no accounts were written off as uncollectible. The company estimated that 1.5% of the credit sales would be uncollectible. During the following year, 2016, M&D had sales, all on account, totaling $254,000. It collected 80% of these sales, together with 9S% of the outstanding receivables from 2015. During 2016, the accounts of seven customers who owed a total of $4,900, were judged uncollectible and were written off. During the year, the company recovered $1,600 from customers whose accounts had previously been written off (note that this amount was not included in the collection figures given above). The company estimated its bad debt expense to be 1% of its credit sales. Prepare the necessary journal entries for recording all the preceding transactions in the accounting system of M&D Inc. for 2015 and 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually Debit Credit Account Titles and Explanation 2015 (To record credit sales) (To record cash colected from customers) recognize the bad debts expense) To record credit sales) (To record cash collected from customers) To write off accounts judged uncollectible) To reinstate an account that was previously written ofr) To record subsequent collection of accounts that were previously written off) To recoanize the bad debts expense) Show the accounts receivable section of the statement of financial position at December 31, 2016 Accounts receivable, December 31, 2016 Allowance for doubtful accounts Accounts receivable, net