Cornerstone Exercise 5-28 (Algorithmic) Aging Method

On January 1, 2019, Smith, Inc., has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable	$390,000
Allowance for Doubtful Accounts (a credit balance)	3,900

During 2019, Smith had $2,855,000 of credit sales, collected $2,905,000 of accounts receivable, and wrote off $3,850 of accounts receivable as uncollectible. At year end, Smith performs an aging of its accounts receivable balance and estimates that $3,800 will be uncollectible.

Required:

1. Calculate Smith's preadjustment balance in accounts receivable on December 31, 2019. $

2. Calculate Smith's preadjustment balance in allowance for doubtful accounts on December 31, 2019. $

3. Prepare the necessary adjusting entry for 2019.

	Record adjusting entry for bad debt expense estimate