USE SEPARATE EXCEL ANSWER SHEET. The unadjusted trial balance of ABC Company reports the following balances at the end of the year:

Accounts receivable $52,000 DEBIT

Allowance for doubtful accounts $ 2,200 CREDIT

Sales (all on credit) 100,000 CREDIT

Sales returns and allowances 23,000 DEBIT

Sales discounts 5,000 DEBIT

Instructions: Prepare the journal entry to record bad debt expense under each of following mutually exclusive situations: (1) Bad receivables are estimated to be 5% of ending accounts receivable. (2) Bad debt expense is estimated to be 1% of net sales.