Company C uses the Percentage of Sales method to calculate bad debt expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

Accounts Receivable 400,000 debit balance Allowance for Doubtful accounts 500 credit balance Net Sales 800,000 credit balance Bad Debt Expense 2,000 debit balance All sales are made on credit. Based on past experience, the company estimates 0.7% of net credit sales to be uncollectible.

1. What adjusting entry should the company make at the end of the current year to record its estimated bad debt expense?

2. what would be the balance of the Allowance for Doubtful accounts after the adjustment is made?

Company D is a merchandiser of MLB Hats. One of their biggest customers calls Company D and expresses concerns over their ability to pay the $10,000 owed to Company D. Company D agrees to covert the Receivable into a 90-day note with 8% interest.

1. What is the total interest that the customer will pay to Company D at the end of the 90 days? Use a 360-day year calculation.

Company E purchased a piece of equipment for $28,000 on April 1, Year 1. The company has a fiscal year-end of 12/31. The asset will be depreciated using the straight-line method over its four-year useful life.

1. Assuming the asset's residual value is $2,000, the company should recognize depreciation expense in Year 1 and Year 2 in the amount of?