The trial balance before adjustment of XYZ Company reports the following balances: Dr. Cr. Accounts receivable $100,000 Allowance for doubtful accounts $ 2,500 Sales (all on credit) 750,000 Sales returns and allowances 40,000 Instructions Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.

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The trial balance before adjustment of XYZ Company reports the following balances: Dr

Accounting Mar 23, 2021

The trial balance before adjustment of XYZ Company reports the following balances:

	Dr.	Cr.
Accounts receivable	$100,000
Allowance for doubtful accounts		$ 2,500
Sales (all on credit)		750,000
Sales returns and allowances	40,000

Instructions

Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.

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