E8-3 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2) During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $220,000, of which $110,000 was on credit. At the start of 2021, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $700 credit balance. Collections of accounts receivable during 2021 amounted to $78,000 Data during 2021 follow: a. On December 10, a customer balance of $2,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year Required: 1. Give the required journal entries for the two events in December 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 28 Reg 3 Give the required journal entries for the two events in December. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) E8-3 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2) During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $220,000, of which $110,000 was on credit. At the start of 2021, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $700 credit balance. Collections of accounts receivable during 2021 amounted to $78,000 Data during 2021 follow: a. On December 10, a customer balance of $2,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December. 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg 3 Show how the amounts related to Bad Debt Expense would be reported on the income statement. Kelly's Camera Shop Income Statement (partial) Year ending December 31, 2021 Operating Expenses: E8-3 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2) During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $220,000, of which $110,000 was on credit. At the start of 2021, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $700 credit balance. Collections of accounts receivable during 2021 amounted to $78,000 Data during 2021 follow: a. On December 10, a customer balance of $2,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year Required: 1. Give the required journal entries for the two events in December 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement 2.b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Req3 Show how the amounts related to Accounts Receivable would be reported on the balance sheet. Kelly's Camera Shop Balance Sheet (partial) At December 31, 2021 Current Assets E8-3 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2) During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $220,000, of which $110,000 was on credit. At the start of 2021, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $700 credit balance. Collections of accounts receivable during 2021 amounted to $78,000. Data during 2021 follow: a. On December 10, a customer balance of $2,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 28 Reg 3 On the basis of the data available, does the 2 percent rate appear to be reasonable