Information for Smiling Sam Corporation is as follows:

Allowance for doubtful accounts at 1/1/18	$33,000 cr.
Accounts Receivable at 12/31/18	$500,000
Write-offs for 2018	$5,000
Credit sales for 2018	1,500,000

Part 1: What is the balance of Allowance for doubtful accounts at 12/31/18 before any adjusting entries are made? Please indicate whether it is a Dr. or Cr. balance.

Part 2: Prepare the 12/31/18 adjusting entry to record bad debt expense assuming that Sam estimates that of outstanding receivables will be uncollectible. Show your work.

Part 3: Assuming that Sam estimates 2% of credit sales will be uncollectible, calculate the net realizable value of receivables at 12/31/18. Show your work.