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    Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 8% of gross A/R and (b) 1.5% of net sales.

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    (1) At January 1, 1993, the credit balance in the Allowance for Doubtful Accounts of Kap Shin Co. was $400,000. For 1993, the provision for doubtful accounts is based on a percentage of net sales. Net sales for 1993 were $70,000,000. On the basis of the latest available facts, the 1993 provision for doubtful accounts is estimated to be 0.8% of net sales. During 1993, uncollectible receivables amounting to $490,000 were written off against the allowance for doubtful accounts. Prepare a schedule computing the balance in Shin's Allowance for Doubtful Accounts at 12-31-1993.

    (2) The trial balance before adjustment of Don Quixote, Inc shows the following balances:Accounts Receivable has a debit balance of $90,000, Allowance for Doubtful Accounts has a debit balance of $1750, Sales (all on credit) has a credit balance of $680,000 and Sales Returns & Allowances has a debit balance of $30,000.
    Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 8% of gross A/R and (b) 1.5% of net sales.

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