Problem $5-7($AICPA Adapted$)$

Sigma Company began operations on January $1,2022.$ On

December $31,2022$ and $2023,$ the entity provided for

uncollectible accounts expense based on $1\%$ of annual credit

sales.

On January $1,2023,$ the entity changed the method of

determining the allowance for doubtful accounts by applying

certain percentages to the aging of accounts receivable.

Days past invoice date

Percent uncollectible

In addition, the entity wrote off all accounts receivable that

were over $1$ year old.

The following additional information related to the years ended

December $31,2023$ and $2022$:

Required:

Determine the allowance for doubtful accounts on January

$1,2023.$

Determine the allowance for doubtful accounts on December

$31,2023$ before adjustment.

Determine the required allowance on December $31,2023.$

Prepare the adjustment to record the doubtful accounts

expense for $2023.$