Chapter 9, Problem 2BP

At December 31, Ingleton Company reports the following results for the year.

In addition, its unadjusted trial balance includes the following items.

Required

1. 1. Prepare the adjusting entry to record bad debts under each separate assumption.
   1. a. Bad debts are estimated to be 2.5% of credit sales.
   2. b. Bad debts are estimated to be 1.5% of total sales.
   3. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.
2. 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1a.
3. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1c.