An excerpt from the trial balance of ABC company shows the following: Accounts receivable – $100,000 Allowance for bad debts- $10,000 Sales- $5,000,000 Sales Discount- $3,000 Sales Returns and Allowances-

An excerpt from the trial balance of ABC company shows the following: Accounts receivable – $100,000 Allowance for bad debts- $10,000 Sales- $5,000,000 Sales Discount- $3,000 Sales Returns and Allowances- $30,000 It is the company’s policy to provide 1% of gross credit sales as bad debts. Cash sales ammounted to $2,000,000 Questions: 1) Adjusting entries on December 31 2) Balance of Bad debts expense as of December 31 3) Balance of Allowances for Bad debts as of Decemember 31 4) Should the adjustment was not made, what is the effect on net income?