Challenge Exercise 3 Wildcat Company has accounts receivable of $130,000 at March 31. An analysis of the accounts shows the following Month of Sale March February January Prior to January Balance, March 31 $80,000 27,600 14,500 7.900 $130.000 Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,700 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. Wildcat estimates that 8% of accounts receivable will become uncollectible. The company is considering using the estimate of bad debts shown below. Age of Accounts 1-30 days 31-60 days 61-90 days Over 90 days Estimated Percentage Uncollectible 2.0% 5.0% 30.0% 50.0% Instructions: (a) Prepare the adjusting entry at March 31 to record bad debt expense, assuming that the 8% estimate is used. (b) Prepare the adjusting entry at March 31 to record bad debt expense, assuming the aging schedule is used. (c) Compare the two approaches used above