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E$8-8($Algo$)$ Recording and Reporting Allowance for Doubtful Accounts Using the Percentage of Credit Sales and Aging of Accounts Receivable Methods $[$LO $8-2]$

Innovative Tech Incorporated $($ITI$)$ has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $$100,000$ and estimated that $\frac{1}{4}$ of $1$ percent of those sales would be uncollectible.

Required:

Prepare the November adjusting entry for bad debts.

Starting in December, ITI switched to using the aging method. At its December $31$ year$-$end, total Accounts Receivable is $$91,100,$ aged as follows: $(1)1$ to $30$ days old, $$76,000$; $(2)31$ to $90$ days old, $$11,000$; and $(3)$ more than $90$ days old, $$4,100.$ The average rate of uncollectibility for each age group is estimated to be $(1)11$ percent, $(2)22$ percent, and $(3)44$ percent, respectively. Prepare a schedule to estimate an appropriate year$-$end balance for the Allowance for Doubtful Accounts.

Before the end$-$of$-$year adjusting entry is made, the Allowance for Doubtful Accounts has a $$1,650$ credit balance at December $31.$ Prepare the December $31$ adjusting entry.

Show how the various accounts related to accounts receivable should be shown on the December $31$ balance sheet.

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Prepare the November adjusting entry for bad debts. $($If no entry is required for$-$a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$

Journal entry worksheet

$1$

Record the adjusting entry for bad debts as of November $30.$

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$November $30,,,],[,,,],[,,,],[,,,],[,,,]]$