Week 4 Pre-assignment: Black River Wholesalers Guidance comes from pages 7 and 8 of notebook Black River is a wholesaler selling general merchandise to small sports retailers. All sales are on credit with 30 day terms. Black River started the 2015 financial year with accounts receivable of $205,000 and an allowance for bad debts of $15,000. At the end of each month, Black River records bad debt expense equal to 2% of sales. The following results occurred during 2015: Month Sales Restorations of receivable written off receivable previously written off January February March $120,000 1,000 500 140,000 April May June 1300 $1,800 170,000 August September 140,000 130,000 2,000 145,0003.500 November December Part A: Create a tedger account for the allowance for bad debts and record all of the above activity. Arrive at the balance in the allowance for bad debts prior to the arrival of the auditor. Part B; Prior to the arrival of the auditor, accounts receivable total $370,000. Upon the arrival of the auditor, you are asked to do an aging schedule. Prior to doing the aging schedule, you are instructed to write off a receivable of $12,000 that is over a year old and the debtor has entered bankruptcy. The age and allowance to be provided are as follows: regonyAecoaege red Amount of Percentage nce required Over 90 days 61-90 days 31-60 days 30 days or less 40% 80,00 10% 5% 1% Make the required adjusting entries and enter them into your allowance for bad debts ledger. Part C: Calculate total bad debt expense for the year