Glacier Ice Company uses a percentage-of-net-sales method to account for estimated bad debts. Historically, 3 percent of net sales have proven to be uncollectible. During 1996 and 1997 the company reported the following: 1997 1996 Gross sales $1,500,000 $1,800,000 Sales discounts 100,000 130,000 Sales returns 50,000 20,000 required:

a. Prepare the necessary adjusting entry on December 31, 1996 to record the estimated bad debt charge for 1996.

b. Assume that the January 1, 1996 balance in Allowance for Doubtful Accounts was $65,000 (credit) and that $70,000 in bad debts were written off the books during 1996. What is the December 31, 1996 balance in this account after adjustments?

c. Prepare the necessary adjusting entry on December 31, 1997 to record the estimated bad debt charge for 1997.

d. What is the December 31,1997 balance in Allowance for Doubtful Accounts? Assume that $85,000 in bad debts were written off the books during 1997.