Aaron Autobody showed the following partial unadjusted results at October 31, 2020, its year-end: AccountDebitCreditSales  $1,710,000Accounts receivable$154,000  Allowance for doubtful accounts 3,200   Part 1 a

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Aaron Autobody showed the following partial unadjusted results at October 31, 2020, its year-end:

AccountDebitCreditSales  $1,710,000Accounts receivable$154,000  Allowance for doubtful accounts 3,200  

Part 1

a. Assuming Aaron estimates bad debts to be 1.5% of sales, prepare the adjusting entry at October 31, 2020.

b. Show how accounts receivable would be shown on the October 31, 2020, balance sheet using your calculations in (a).

Part 2

c.Instead of (a), assume that Aaron estimates bad debts to be 5% of outstanding accounts receivable. Prepare the adjusting entry at October 31, 2020.

d. Show how accounts receivable would be shown on the October 31, 2020, balance sheet using your calculations in (c).