Innovative Tech Incorporated $($ITI$)$ has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $$120,000$ and estimated that $\frac{3}{4}$ of $1$ percent of those sales would be uncollectible.

Required:

a$.$ Prepare the November adjusting entry for bad debts using the percentage of credit sales method.

b$.$ Starting in December, ITI switched to using the aging of accounts receivable method. At its December $31$ year$-$end, total Accounts Receivable is $$99,800,$ aged as follows:

$(1)1$ to $30$ days old, $$83,000$;

$(2)31$ to $90$ days old, $$12,000$; and

$(3)$ more than $90$ days old, $$4,800.$

Prepare a schedule to estimate an appropriate year$-$end balance for the Allowance for Doubtful Accounts using the estimated average rate of uncollectibility for each age group as follows:

$(1)12$ percent,

$(2)24$ percent, and

$(3)48$ percent, respectively.

c$.$ Before the end$-$of$-$year adjusting entry is made, the Allowance for Doubtful Accounts has a $$2,000$ credit balance at December $31.$ Prepare the December $31$ adjusting entry for bad debts using the aging of accounts receivable method.

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