At the end of the current year, Accounts Receivable has a balance of $760,000; Allowance for Doubtful Accounts has a debit balance of $7,000; and sales for the year total $3,420,000. Bad debt expense is estimated at 1/4 of 1% of sales.
a. Determine the amount of the adjusting entry for uncollectible accounts.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expenses.