Data for Violet Co.’s year ended December 31, 2022 follows: Sales for the year were $12,000,000, of which 75% were on-account and 25% were cash sales.

The balance in the Accounts Receivable account at the beginning of the year was $3,000,000

The balance in the Allowance for Doubtful Accounts account at the beginning of the year was $500,000

During the year, $10,000,000 in cash was received from on-account customers in payment of their accounts.

During the year write-offs of Accounts Receivable were recorded for $600,000.

Required: 1. Assuming Violet Co. uses the “percentage of credit sales” method to estimate bad debt, show the adjusting journal entry that the company will record at 12/31/22 to update its Allowance for Doubtful Accounts account, if it estimates 3% of the credit sales will not be collected.

2. Assuming Violet Co. uses the “ageing of accounts receivable” method to estimate bad debt, show the adjusting journal entry that the company will record at 12/31/22 to update its Allowance for Doubtful Accounts account, using the following data.

Ageing: 50 % of receivables are current, 25% are past-due from 1 to 30 days, 15% are past-due from 31 to 60 days, and 10% are past due more than 60 days. Estimated collectability: The company expects it will not be able to collect 2 % of current receivables, 5% of the past-due from 1 to 30 days receivables, 20% of the past-due from 31 to 60 days receivables, and 40% of the receivables which are past due more than 60 days.