2. On the basis of the schedule in part (1), prepare the journal entry on December 31, 2016, to estimate bad debts. Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), +" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income 2016 Dec. 31 3. Show how accounts receivable would be presented on the December 31, 2016, balance sheet. Sparkle Jewels Partial Balance Sheet Current Assets Using an Aging Schedule to Account for Bad Debts Sparkle Jewels distributes fine stones. It sells on credit to retail jewelry stores and extends terms that require the stores to pay in 60 days. For accounts that are not overdue, Sparkle has found that there is a 90% probability of collection. For accounts up to one month past due, the likelihood of collection decreases to 75%. If accounts are between one and two months past due, the probability of collection is 65%, and if an account is over two months past due, Sparkle Jewels estimates only a 40% chance of collecting the receivable. On December 31, 2016, the credit balance in Allowance for Doubtful Accounts is $13,800. The amounts of gross receivables by age on this date are as follows: Category Amount Current $196,000 Past due: Less than one month 44,600 One to two months 20,400 1,300 Over two months Required: 1. Prepare a schedule to estimate the amount of uncollectible accounts at December 31, 2016. Sparkle Jewels Aging Schedule to Account for Bad Debts Amount Estimated Percent Uncollectible Estimated Amount Uncollectible Category Current $196,000 % Past due: Less than one month 44,600 % One to two months 20,400 % Over two months 1,300 % Totals $262,300 $