Credit Losses Based on Percentage of Credit Sales Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at 1% of credit sales, which were $4,050,000 during the year. On December 31, the Accounts Receivable balance was $675,000, and the Allowance for Doubtful Accounts had a credit balance of $45,900 before adjustment a. Determine the amount and financial statement effect of the adjustment to record the credit losses for the year. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Assets Liabilities Stockholders Equity Revenues Expenses Net Income b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. Note: Do not use negative signs with any of your answers. Balance Sheet (excerpt) Current assets Cash Inventory Other current assets Total Current Assets Please answer all parts of the question $XXXXXXX O 0 XXXXXXXX XXXXX $XXXXXXXXXX