A company uses the aging of accounts receivable method to estimate its bad debts expense.On December 31 of the current year an aging analysis of accounts receivable revealed the following:

AccountsEstimated

ReceivableAccounts AgeUncollectible

$620,000Not due yet0.5%

270,0001-30 days overdue2.0

145,00031-60 days overdue8.0

55,00061-90 days overdue20,0%

32,00091-120 days overdue50.0%

18,000Over 120 days overdue70.0%

$1,140,000Total

Required:

a.Calculate the amount of the Allowance for Doubtful Accounts that should be reported on the current year-end balance sheet.

b.Calculate the amount of the Bad Debts Expense that should be reported on the current year's income statement, assuming that the balance of the Allowance for Doubtful Accounts on January 1 of the current year was $44,000 and that accounts receivable written off during the current year totaled $49,200.

c.Prepare the adjusting entry to record bad debts expense on December 31 of the current year.

d.Show how Accounts Receivable will appear on the current year-end balance sheet as of December 31.