Question 3: Entries for Bad Debt Expense: Below is a Trial balance before adjustment for Risen Company: Accounts Receivable Allowance for Doubtful Accounts Sales (all on Credit) Sales Returns and Allowances $ DR 200,000 45,000 CR 3,000 900,000

(A) Prepare the journal entries for estimated bad debts assuming that the doubtful accounts are estimated to be

a. 6% of gross accounts receivable

b. 1% of Net Sales

(B) Assume that all of the information above is the same, except the allowance for doubtful accounts has a debit balance of $3,000 instead of a credit balance. Ow will this affect the journal entries in part (a)?