E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2] During the year ended December 31, 2015, Kellys Camera Shop had sales revenue of $150,000, of which $75,000 was on credit. At the start of 2015, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $560 credit balance. Collections of accounts receivable during 2015 amounted to $64,000. Data during 2015 follow: a. On December 10, a customer balance of $1,300 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.

2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2015.