Jarden Company has credit sales of $3,600,000 for year 2016. On December 31, 2016, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31, 2016, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.

Required
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2016, using the aging of accounts receivable method.
2. Prepare the adjusting entry to record bad debts expense at December 31, 2016.
Analysis Component
3. On June 30, 2017, Jarden Company concludes that a customer's $4,750 receivable (created in 2016) is uncollectible and that the account should be written off. What effect will this action have on Jarden's 2017 net income? Explain.

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C. December 31, 2016 Accounts Receivable $830,000 254,000 86,000 38,000 12,000 Age of Expected Percent Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due 1.25% 2.00 6.50 32.75 68.00 63 7