Early in 2018, WXY, Inc. determined that it has failed to adjust its allowance for doubtful accounts when preparing its 2017 financial statements. It should have increased the allowance account by $100,000 at the end of 2017. They have not closed the books for 2018.

A. Record the journal entry in 2018 to correct this error ignoring tax effects assuming single statement presentation.

B. Explain how it would affect the presentation of the 2018 financial statements if they presented both 2017 and 2018.