Assume that Witz and Steenhoven, Inc. uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n/45. The balance of each account receivable is aged on the basis of four time periods as follows: (1) not yet due, (2) up to 6 months past due, (3) 6 to 12 months past due, and (4) more than 1 year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectibility is (a) 1 percent, (b) 5 percent, (c) 20 percent, and (d) 50 percent, respectively. At December 31, 2022 (end of the current accounting year), the Accounts Receivable balance was $39,500 and the Allowance for Doubtful Accounts balance was $1,550 (credit). In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December 31, 2022, follow:

Required:
1. Compute the total accounts receivable in each age category.
2. Compute the estimated uncollectible amount for each age category and in total.
3. Give the adjusting entry for bad debt expense at December 31, 2022.
4. Show how the amounts related to accounts receivable should be presented on the 2022 income statement and balance sheet.

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Date 3/13/2022 5/12/2022 9/30/2022 11/01/2021 06/01/2022 12/01/2022 10/31/2022 12/10/2022 05/02/2022 06/01/2022 06/15/2022 07/15/2022 10/01/2022 11/15/2022 12/15/2022 12/30/2022 Explanation Sale Collection Collection R. Devens-Account Receivable Sale Collection Collection Sale Sale Sale Collection Sale Debit C. Howard-Account Receivable 19,000 Collection Collection Sale Collection Sale D. McClain-Account Receivable 31,000 12,000 T. Skibinski-Account Receivable 15,000 10,000 26,000 4,500 H. Wu-Account Receivable 13,000 Credit 10,000 7,000 20,000 5,000 8,000 15,000 10,000 16,000 Balance 19,000 9,000 2,000 31,000 11,000 6,000 12,000 4,000 15,000 25,000 10,000 0 26,000 10,000 14,500 13,000