Inland Equipment uses the allowance method to account for bad debts. On December 31, 2013, Allowance for Doubtful Accounts has a $600 credit balance. Journalize the year-end adjusting entry for bad debts assuming the following independent scenarios: 1. Inland Equipment estimates bad debts as Vi of 1% of net credit sales. Net credit sales for the year equal $550,000. 2. Based on an aging of Accounts Receivable, Inland Equipment estimates that bad debts will equal $2,575.
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