Question 4: Accounts Receivable Transactions

At the end of the current year, the accounts receivable account has a debit balance of $1,270,000 and the net sales for the year total $16,455,000.

1. Determinethe amount of the adjusting entry for the allowance for doubtful accounts and bad debt expense under each of the following assumptions. 2. Please alsoprepare the adjusting journal entry for each of the four scenarios below:

1. The allowance account before adjustments has a debit balance of $4,200. Bad debt expense is estimated at of 1% of sales.
2. The allowance account before adjustments has a debit balance of $4,200. An aging of the accounts indicated estimated doubtful accounts of $77,800.
3. The allowance account before adjustments has a credit balance of $7,600. Bad debt expense is estimated at of 1% of sales.
4. The allowance account before adjustments has a credit balance of $7,600. An aging of the accounts indicated estimated doubtful accounts of $42,600.