Prepare the entry for estimated bad debts assuming that the

Question

Problem-

The trial balance before adjustment of Reba Mclntyre Inc. shows the following balances.

                                                                 Dr.                 Cr.
Accounts Receivable                               $90,000
Allowance for doubtful Accounts                  1,750
Sales (all on credit)                                                      680,000

Instructions:

Prepare the entry for estimated bad debts assuming that the allowances is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 1% of net sales.

Additional information-

The problem belongs to Accounting Basics and it is about passing journal entries for estimated bad debts assuming allowances to provide for doubtful accounts.