1. On December 31, 2021, Vaden Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:

Accounts receivable $350,000

Allowance for doubtful accounts 400 (credit balance)

Sales revenue (all credit sales) 1,050,000

Required:

Prepare the necessary year-end adjusting entry to estimate bad debt expense for each of the following independent assumptions:

1. Accounts Receivable is aged into three categories Current $210,000, 30 60 days past due - $80,000 and >60 days past due - $60,000. Additionally, the amount uncollectible for each category is 5% for current, 10% for 30-60 days and 25% for > 60 days.
2. It is estimated that 2% of credit sales for the year will prove to be uncollectible.