MIDTERM REVIEW HANDOUT QUESTION 1 Company had $25,000 accounts receivable and $3,750 allowance credit balance as of the beginning of the year. During the year, the following transactions occurred: A customer went bankrupt owing $2,000 (write-off) Credit sales were realized as $20,000 Do the journal entries for the transactions above. Assuming that i) The aging analysis showed $4,000, what would be the adjusting entry? Show its presentation on the balance sheet and income statement. ii) Percentage of net sales is estimated to be 20%, what would be the adjusting entry? Show its presentation on the balance sheet and income statement