Billy, Inc., analyzed its accounts receivable balances at December 31 and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:

The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is \(\$ 1,560\) on December 31, before any adjustments.

a. Prepare the adjusting entry for estimated credit losses on December 31 .

b. Prepare the journal entry to write off the Matthews Company's account on the following April 10 , in the amount of \(\$ 460\).

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Age Group 0-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due 18,000 Over 180 days past due. 14,000 Balance Probability of Noncollection $320,000 1 60,000 33,000 3608 10 25 $445,000