Rita Inc. made $900,000 in sales during 2016. Twenty-five percent of these were cash sales. During the year, $22,500 of accounts receivable were written off as being uncollectible. In addition, $13,500 of the accounts that were written off in 2015 were unexpectedly collected. At its’ year-end December 31, 2016, Timken had $225,000 of accounts receivable. The balance in the Allowance for Doubtful Accounts general ledger account was $13,500 credit at December 31, 2015.

Age (days) ………………………… Accounts

Receivable

1-30 …………………………………….. $ 90,000

31-60 ………………………………….….. 45,000

61-90 ………………………………….….. 22,500

91-120 ……………………………………. 54,000

Over 120 …………………………….….. 13,500

Total …….…………………………….. $225,000

The write-off of $22,500

The recovery of $13,500

Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2016.

The estimated uncollectible accounts at December 31, 2016 are calculated as follows:

Age (days) …………………….... Estimated

Loss

percentage

1-30 …………………………………. 1.5%

31-60 …………………………….……. 3%

61-90 …………………………….……. 4%

91-120 ………………………………… 9%

Over 120……………………….…… 45%

Required

Prepare the adjusting entry required at December 31, 2016.