If a company fails to record estimated bad debts were cash realizable value is understated expenses are understated revenues are understated recelvables are understated Question 24 325 pts Tiana Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Tiana Company make if the Allowance for Doubtful Accounts has a credit balance of $2.500 before adjustment? 10,000 Bad Debt Expense Accounts Receivable 10,000 Bad Debt Expense 10.000 Allowance for Doubtful Accounts 10,000 Bad Debt Expense 7.500 Allowance for Doubtful Accounts 7.500 7,500 Bad Debt Expense Accounts Receivable 7,500