A trial balance before adjustment included the following:

		Debit		Credit
Accounts Receivable		140,000
Allowance for doubtful accounts		1,100
Sales				620,000
Sales returns and allowances		8,000

Instructions:

(a) Prepare the required 12/31/2025 adjusting journal entry assuming that the estimate of uncollectible is determined by taking 6% of gross accounts receivable.

(b) After posting the journal entry per part (a) above, what is the net realizable value of accounts receivable.

(c) Assuming customer James Smith has declared bankruptcy on 1/4/2026. Prepare the required journal entry to write off his account.