Credit Losses Based on Percentage of Credit Sales Highland Company uses the allowance method of handling credit losses. It estimates losses at 3% of credit sales, which were $600,000 during the year. On December 31, the Accounts Receivable balance was $840,000, and the Allowance for Doubtful Accounts had a credit balance of $5,100 before adjustment. a. Determine the amount of the adjustment to record credit losses for the year. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Assets Liabilities Equity Revenues Expenses Net Income (18,000) 0 $ 18,000 $ (18,000) b. Show how the Accounts Receivable account and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet Note: Do not use negative signs with any of your answers. Balance Sheet (excerpt) Current assets Cash $ xx.xxx 0 0 Inventory Other current assets Total Current Assets 0 XXX.XXX X.XXX SXXX.XXX