On December 31, Folgeys Coffee Company reports the following results for its calendar year.
| Cash Sales | $ | 900,000 |
|---|---|---|
| Credit Sales | 300,000 |
Its year-end unadjusted trial balance includes the following items.
| Accounts Receivable | $ | 125,000 | debit |
|---|---|---|---|
| Allowance for doubtful accounts | 5,000 | debit |
a. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 3% of credit sales.
b. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1% of total sales.
c. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 6% of year-end accounts receivable