$3$

Required:

points

Prepare the November adjusting entry for bad debts.

$04$:$12$:$59$

Starting in December, ITI switched to using the aging method. At its December $31$ year$-$end, total Accounts Receivable is $$83,500,$ aged as follows: $(1)1$ to $30$ days old, $$70,000$; $(2)31$ to $90$ days old, $$10,000$; and $(3)$ more than $90$ days old, $$3,500.$ The average rate of uncollectibility for each age group is estimated to be $(1)10$ percent, $(2)20$ percent, and $(3)40$ percent, respectively. Prepare a schedule to estimate an appropriate year$-$end balance for the Allowance for Doubtful Accounts.

Before the end$-$of$-$year adjusting entry is made, the Allowance for Doubtful Accounts has a $$1,350$ credit balance at December $31.$ Prepare the December $31$ adjusting entry.

Show how the various accounts related to accounts receivable should be shown on the December $31$ balance sheet.