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At December 31 of the current year, a company reported the following: Total sales for the current year: $780,000, includes $160,000 in cash sales. Accounts

At December 31 of the current year, a company reported the following:

Total sales for the current year: $780,000, includes $160,000 in cash sales.

Accounts receivable balance at Dec. 31, current year: $190,000.

Bad debts written off during the current year: $6,800.

Balance in Bad Debts at beginning of year: $8,300

Please show solutions.

Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal:

a. 1.5% of credit sales.

b. 5% of accounts receivable.

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