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 0 $ 0 $ 0 0 + 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 0 Inventory Other current assets Total Current Assets XXX,XXX X.XXX $XXX.XXX