On Dec 31, 2016, Riyadh Company had accounts:

1. Credit sales $2,500,000
2. Ending accounts receivable 800,000
3. Sales discousnts 120,000
4. Sales returns and allowances 280,000
5. Beginning accounts receivable 750,000
6. Allowance for doubtful accounts (credit) 12,000
7. The aging schedule (aging method) for the companys accounts receivable is shown in the following table:

# of Days Outstanding	Amounts	Estimated % Uncollectible
0-30	$ 100,000	2%
31-60	300,000	4%
61-90	300,000	6%
Over 90	100,000	8%

Requirements:

1. If the compnays use the percentage of net credit sales method (3%) to estimate its allowance for the doubtful accounts, answer the following two questions:

• What is the balance of the allowance for doubtful accounts on Dec 31, 2016?
• What is the bad debt expense that should be reported in the 2016 income statement?

2. If the compnays use the percentage of the aging method of accounts receivable to estimate its alloance for the doubtful accounts, what is the required balance for the the doubtful accounts on Dec 31, 2016?
   • What is the balance of the allowance for doubtful accounts on Dec 31, 2016?
   • What is the bad debt expense that should be reported in the 2016 income statement?