At each calender year end Maize Supply co uses the percent of accounts receivable METHOD to estimate bad debts.
On 31 december 2013 it has an outstanding accounts receivable of $55,000 and it estimates that 2% will be uncollectible. Prepare the adusting entry to record bad debt expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has
a) $415 credit balance before the adjustment
b) $291 debit balance before the adjustment
please use Percent of accounts receivable method.