b) The ledger of Elton Company at the end of the current accounting period (December 31) shows the following account balances before adjustment. Accounts Receivable $150,000 Sales $580,000 Sales Returns and Allowances $20,000 Allowance for doubtful accounts (debit) $500 Instructions: Prepare the adjusting entry at December31, to record bad debt expense under each of the following assumptions: 1. Assume that Elton Company estimates 1% of net sales as uncollectible. 2. Assume that Elton Company estimates 5% of Accounts receivable as uncollectible. 3. A customer, Mr. Thomson became insolvent and his balance of accounts receivable for $7,000 is determined to be uncollectible. Elton Company uses the direct write-off method to record the bad debt expense. Prepare the journal entry. Date Account Title Debit Credit