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5-9 (AICPA Adapted)/ Scion Company began operations on January 1, 2019. On December 31, 2019 and 2020, the entity provided for ancollectible accounts expense based
5-9 (AICPA Adapted)/ Scion Company began operations on January 1, 2019. On December 31, 2019 and 2020, the entity provided for ancollectible accounts expense based on 1% of annual credit sales. On January 1, 2020, the entity changed the method of determining the allowance for uncollectible accounts by applying certain percentages to the aging of accounts receivable. Days past invoice date 31 91 0- 30 90 Percent uncollectible 1 5 20 80 180 Over 180 In addition, the entity wrote off all accounts receivable that were over 1 year old. The following additional information related to the years ended December 31, 2020 and 2019: 2020 2019 Credit sales 3,000,000 2,800,000 Collections, including recovery 2,915,000 2,400,000 Accounts written off 27,000 none Recovery of accounts previously written off 7,000 none Days past invoice date 0 300,000 250,000 - 30 31 80,000 90,000 90 91-180 60,000 45,000 25,000) 15,000 Over 180 Required: 1. Determine the allowance for doubtful accounts on January 1, 2020. 2 Determine the allowance for doubtful accounts on December 31, 2020 before adjustment. 3. Determine the required allowance on December 31, 2020. Prepare the adjustment to record the doubtful accounts expense for the current year
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