On December 31, 2014, RCA Company's Allowance for Doubtful Accounts had an unadjusted debit balance of $7,800. The accountant for RCA has prepared a schedule of the December 31, 2014, accounts receivable by age and, on the basis of past experience, has estimated the percentage of the receivables in each age category that will become uncollectible. This information is summarized as follows:

Required
1. Calculate the amount that should appear in the December 31, 2014, balance sheet as the Allowance for Doubtful Accounts.
2. Prepare the journal entry to record bad debt expense for 2014.
Analysis Component:
On July 31, 2015, RCA concluded that a customer's $4,200 receivable (created in 2014) was uncollectible and that the account should be written off. What effect will this action have on RCA's 2015 net income? Explain your answer.