Analysis of Ball Companys ledger reveals that the January 1st credit balance in Allowance for Doubtful Accounts was $1,200. During the month $1,350 accounts receivable were written off as an uncollectible; credit sales during the month totaled $20,000. Required: a. Prepare the adjusting entry to record the estimated bad debts for the month and give the January 31st balance in the Allowance for Doubtful Accounts, after adjustment, assuming: 1) Analysis of the Accounts Receivable ledger indicates doubtful accounts of $850. 2) Instead of 1), uncollectible accounts are estimated at one percent of credit sales.

b. Follow the same requirements as above except assume that on January 1st Allowance for Doubtful Accounts had a credit balance of $1,860 and that January credit sales were $25,000.