eBook Print Question 2 Not complete Marked out of 11.00 Flag question Credit Losses Based on Credit Sales Lewis Company uses the allowance method for recording its expected credit losses. It estimates credit losses at 6% of credit sales which were $1,500,000 during the year. On December 31, the Accounts Receivable balance was $650,000 and the Allowance for Doubtful Accounts had a credit balance of $60,200 before adjustment. a. Prepare the adjusting entry to record the credit losses for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. a. General Journal Description Date Debit Credit Dec.31 To record allowance for credit losses. Current Assets: $ $ b. (Do not use negative signs with your answers) Check Previous & Save Answers Next Credit Losses Based on Accounts Receivable Hunter, Inc., analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible: Probability of Age Group Balance Noncollection 0-30 days past due $91,000 196 31-60 days past due 21,000 296 61-120 days past due 12,000 596 121-180 days past due 7,000 1096 Over 180 days past due 5,000 2596 $136,000 The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $620 on December 31, before any adjustments. a. Prepare the adjusting entry for estimated credit losses on December 31. b. Prepare the journal entry to write off the Rose Company's account on April 10 of the following year in the amount of $525 a. General Journal Description Date Debit Credit Dec.31 To record allowance for credit losses. b. General Journal Description Date Debit Credit April 10 To write off Rose Company's account. Check