Question 7 The CFO wants you to compare the adjustment entry for doubtful accounts under the percentage of sales and the analysis of receivable methods based for the period ending December 31. Assume the Allowance for doubtful accounts has an unadjusted credit balance of $23,650. Total credit sales for the year is $5,200,000. Management estimates that five percent of credit sales will be bad debt. Management has provided you with the following aging schedule. Age Interval Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Balance 2,255,000 1,120,000 765,000 435,000 230,000 110,000 Percent 48 2.2 8 15 40 80 20 pts Prepare the year-end adjusting entry for the CFO [Round your answers to two decimal places] a. Adjustment for bad debt expense - Percentage of Sales Method b. Adjustment for bad debt expense - Analysis of Receivable Method Edit View Insert Format Tools Table

Question 7 20 pts The CFO wants you to compare the adjustment entry for doubtful accounts under the percentage of sales and the analysis of receivable methods based for the period ending December 31. Assume the Allowance for doubtful accounts has an unadjusted credit balance of $23,650. Total credit sales for the year is $5,200,000. Management estimates that five percent of credit sales will be bad debt. Management has provided you with the following aging schedule. Age Interval Balance Percent Not past due 2,255,000 48 1-30 days past due 1,120,000 2.2 31-60 days past due 765,000 61-90 days past due 435,000 91-180 days past due 230,000 Over 180 days past due 110,000 858 15 40 80 Prepare the year-end adjusting entry for the CFO [Round your answers to two decimal places] a. Adjustment for bad debt expense- Percentage of Sales Method b. Adjustment for bad debt expense-Analysis of Receivable Method Edit View Insert Format Tools Table