Improved Technologies has estimated bad debts using the percentage-of-sales method since their business began operations in 2011.Information relating to bad debts and sales is as follows:
At the beginning of 2014,Improved proposes changing their estimation of bad debt expense from 3 percent of sales to 2.5 percent.Sales for the year totaled $186,000 and actual bad debts amounted to $3,910.
(1)Prepare the journal entry to record bad debt expense at the end of 2014.
(2)Determine the balance in "Allowance for Bad Debts" on December 31,2014.
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