Accounting for Receivables.

The following information is provided about the outstanding Accounts Receivable of the Dr. Doofenshmirtz Corporation. They total $120,000. Of these, $60,000 have been outstanding 0-30 days, $40,000 have been outstanding 31-60 days, and $20,000 have been outstanding for more than 60 days. Of the 0-30 day category, 6% are expected to be uncollectible, of the 31-60 day category, 8% are expected to be uncollectible, and of the over-60-day group, 20% are expected to be uncollectible.

2) Now Doofenshmirtz Corporation needs to make the adjusting entry to record the uncollectible.

a) Make the journal entry on the assumption that the unadjusted balance in the Allowance for Uncollectible Accounts is a $400 credit balance.

b) Now make the entry on the assumption that the unadjusted balance in the Allowance for Uncollectible Accounts is a $280 debit balance.