Answer:
A. Dr Bad debts expense 85,230
Cr Allowance for Doubtful accounts 85,230
B. Dr Bad debts expense 75,870
Cr Allowance for Doubtful accounts 75,870
C.,Dr Bad debts expense 80,085
Cr Allowance for Doubtful accounts 80,085
Explanation:
Preparation of the adjusting entry to record bad debts under each separate assumption
A. Dr Bad debts expense 85,230
Cr Allowance for Doubtful accounts 85,230
(5,682,000*1.5%)
B. Dr Bad debts expense 75,870
Cr Allowance for Doubtful accounts 75,870
[(1,905,000+5,682,000)*1%]
C.Dr Bad debts expense 80,085
Cr Allowance for Doubtful accounts 80,085
[(1,270,100*5%)+16,580]
