X Company estimates that 2% of its sales on account for the year ended December
31, 200A will be uncollectible. If the total sales is $4,500,000 and 20% is cash sales,
the adjusting entry for the December 31, 200A will include

1. Accounts Receivable $90,000
2. Allowance for Bad Debts $ 72,000
3. Bad Debts Expense $ 18,000
4. An adjusting entry is not necessary