Problem 3 Malachi Inc unadjusted trial balance includes the following balances: Dr. Cr. Accounts receivable $150,000 Allowance for doubtful accounts. $ 3,500 Sales (all on credit)........ 720,000 Sales returns and allowances... 30,000 Instructions a) Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 5% of gross accounts receivable and (2) 2% of net sales. b) Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of $3,500 instead of a credit balance