AGING METHOD On January 1, 2009, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable $363,000 Allowance for Doubtful Accounts (a credit balance) 44,000 During 2009, Hungryman had $3,100,000 of credit sales, collected $2,915,000 of accounts receivable, and wrote off $50,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $15,000 will be uncollectible.

Required:

. Calculate Hungryman’s preadjustment balance in accounts receivable on December 31, 2009.

. Calculate Hungryman’s preadjustment balance in allowance for doubtful accounts on December 31, 2009.

. Prepare the necessary adjusting entry for 2009.

Cornerstone Exercise