Question 1 At January 1, 2017, the credit balance of Ayayai Corp.s Allowance for Doubtful Accounts was $407,000. During 2017, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2017 were $80 million, of which 89% were on account. Based on the information available at the time, the 2017 bad debt expense was estimated to be 0.79% of net credit sales. During 2017, uncollectible receivables amounting to $490,000 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2017, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $524,000.

1. Calculate the bad debt expense accrual?

2. Prepare any necessary journal entry at year end to adjust the allowance for doubtful accounts to the required balance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation Debit Credit