There are 4 questions, To fill the journal and balance sheet and income statement for each question. Thanks

Allowance Method of Accounting for Bad DebtsComparison of the Two Approaches

Stonemoss Enterprises had the following data available for 2016 (before making any adjustments):

Accounts receivable, 12/31/16	$326,100	(Dr.)
Allowance for doubtful accounts	2,600	(Cr.)
Net credit sales, 2016	836,000	(Cr.)

Required:

1. Prepare the journal entry to recognize bad debts under the following assumptions: (a) bad debts expense is expected to be 2% of net credit sales for the year. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

(b) Stonemoss expects it will not be able to collect 6% of the balance in accounts receivable at year-end. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

2. Assume instead that the balance in the allowance account is a $2,600 debit. How will this affect your answers to part (1)?

a. Based on 2% of net credit sales:

How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

b. Based on 6% of year-end accounts receivable:

How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

Journal Balance Sheet Stockholders' Description Debit Credit Liabilities Equity Date Dec. 31 Assets