Question - At December 31 of the current year, a company reported the following:
Total Sales - $980,000
Cash Sales - $160,000
Accounts receivable - $160,000
Allowance for Doubtful Accounts balance at January, beginning of current year - $73,000
Bad debts written off during current year - $5,800
Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal 5% of accounts receivable.