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Question - The December 31, 2015 balance sheet of the Peters Company had Accounts Receivable of $1,500,000 and a credit balance in Allowance for Doubtful Accounts of $25,000. During 2018, the following transactions occurred: Net Sales were 5,000,000.
(a) If the company uses the percentage of sales basis to estimate bad debts and anticipates 5% of net sales to be uncollectible, what is the adjusting entry at December 31, 2015?
(b) If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 2% of accounts receivable, what is the adjusting entry at December 31, 2015?
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