At December 31, 2017, before any year-end adjustments, the Accounts Receivable balance of Sunset Hills Clinic is $235,000. Allowance for Uncollectible Accounts has a $6,500 credit balance. Sunset Hills prepares the following aging schedule for accounts receivable:

Requirements

1. Based on the aging-of-receivables method, is the unadjusted balance of the allowance account adequate? Is it too high or too low? How does management determine what percentages to use for estimating uncollectible accounts?

2. Make the entry required by the aging schedule. Prepare a T-account for the allowance.

3. Show how Sunset Hills Clinic will report Accounts Receivable on its December 31 balance sheet.