M8-9 Recording Bad Debt Estimates Using the Two Estimation Methods [LO 8-2] Assume that Simple Co. had credit sales of $284,000 and cost of goods sold of $167,000 for the period. It estimates that 2 percent of credit sales in uncollectible accounts when it uses the percentage of credit sales method and it estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $6,500 when it uses the aging method. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $420. 1. Prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method and (b) aging of accounts receivable method. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Assume Simple Co. had credit sales of $284,000 and cost of goods sold of $167,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Note: Enter debits before credits General Journal Debit Credit Record entry Clear entry View general journal 2. Which of these methods is required by GAAP? O Aging of accounts receivables O Percentage of credit sales O Ether the percentage of credit sales or aging of accounts receivables References General Journal