Tolco Importers Inc. had the following balances at December 31, 2014, before the year-end adjustments:

The aging of accounts receivable yields these data:

1. Journalize Tolco Importers Inc.'s entry to adjust the allowance account to its correct balance at December 31, 2014.
2. Prepare the T-account for Allowance for Doubtful Accounts.
3. Repeat question 1 assuming that, instead of aging the accounts, the allowance is calculated as 3.5 percent of the accounts-receivable balance.

Transcribed Image Text:

Allowance for Accounts Receivable 148,000 Doubtful Accounts 4,000 Age of Accounts Receivable 0-60 Days Over 60 Days Total Receivables Accounts receivable Percent uncollectible $140,000 $8,000 20% $148,000