Elliot inc has the following unadjusted account balances at dec 31, 2021

Account balances

Accounts recievable (debit 200,000)

Allowance for doubtful accounts (debit 0) (credit 5,000)

Accounts (credit 2,000,00)

Sales (credit 0)

Required:

1. Assume Elliot estimates that three percent of sales will not be collected

A) What amount of bad debt expense will be reported on Elliot's income statement on Dec 31st?

B) What amount for allowance for doubtful accounts will be reported on Elliot's statement of financial position on Dec 31st, 2021?

2. Assume Elliot estimates that six percent of its Accounts receivable will not be collected,

A) What amount of bad debt expense will be reported on Elliot's income statmenet on Dec 31st?

B) What amount of allowance for doubtful accounts will be reported on Elliot's statement of financial position Dec 31st, 2021?