Response to the following problem:
At December 31, GreenTea Company reports the following results for its calendar-year.
Cash sales . . . . . . . . . . . . $1,200,000
Credit sales . . . . . . . . . . . 900,000
Its year-end unadjusted trial balance includes the following items.
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . $195,000
debit Allowance for doubtful accounts . . . . . . . . . . . . 3,000 debit
a. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectible are estimated to be 1.5% of credit sales.
b. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectible are estimated to be 0.5% 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.