Question 6 (10 points)

The records of Eric Company showed the following pre-adjustment information on December 31, 2011:

Net sales (80% on credit) $350,000

Accounts receivable $160,000

Allowance for doubtful accounts $4,100 (debit balance)

Prepare journal entries to record the estimates for bad debt expense assuming:

(a) Bad debts are estimated to be 4% of credit sales.

(b) Bad debts are estimated to be 3% of net sales.

(c) An aging schedule determines that uncollectible accounts should be $13,000.