On December 31, 2020,Jimmy Corp.s unadjusted trial balance includes the following balances:

Dr. Cr.

Accounts receivable..................................................... $150,000

Allowance for doubtful accounts.................................. $ 3,500

Total sales..................................................................... 800,000

Sales returns and allowances........................................ 30,000

Total sales include $80,000 of cash sales.

Instructions

a) Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be:

(1) 5% of gross accounts receivable

(2) 1% of net sales

b) Assuming Packers observed the 5% of gross account receivable option, with proper title and classification, provide the detailed presentation of accounts receivable on Packers statement of financial position as of December 31, 2020