Requirement 2. At what level of revenues will CathyCathy Rugs earn the same operating income under either option? a. For what range of unit sales will CathyCathy Rugs prefer option 1? b. For what range of unit sales will CathyCathy Rugs prefer option 2? Begin by determining the formula to calculate the operating income where each option is equal.

Exercise 7-7 martinez company reports the following financial information before adjustments. dr. cr. accounts receivable $168,900 allowance for doubtful accounts $3,200 sales revenue (all on credit) 849,300 sales returns and allowances 50,440 prepare the journal entry to record bad debt expense assuming martinez company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but allowance for doubtful accounts had a $1,550 debit balance. (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when the amount is entered. do not indent manually.)