The ledger of Hixson Company at the end of present year shows Accounts Receivable $120,000, Sales $840,000 and Sales Returns and Allowances $30,000.

Journalize entries to record the allowance for doubtful accounts by using two distinct bases.

Instructions:

a) If Hixson utilizes the direct prepare-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, supposing Hixson finds out that Fell's $1,400 balance is uncollectible.

b) If Allowance for Doubtful Accounts consists of a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, supposing bad debts are expected to be:

• 1% of net sales
• 10% of accounts receivable

c) If Allowance for Doubtful Accounts consists of a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, supposing bad debts are expected to be:

• 0.75% of net sales
• 6% of accounts receivable