Innovations Corp (IC) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November 2020, IC sold services on account for $106,000 and estimated that of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $99,000, aged as follows: (1) 1 to 30 days old, $80,000; (2) 31 to 90 days old, $13,500; and (3) more than 90 days old, $5,500. Experience has shown that for each age group, the average rate of uncollectibility is (1) 1 percent, (2) 15 percent, and (3) 40 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $2,200 credit balance at December 31, 2020.Required: 1. Prepare the November 2020 adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts.

Aging of Accounts Receivable Estimated Amount Uncollectible

1-30 days

31-90 days

More than 90 days

Estimated balance in allowance for doubtful accounts

Prepare the December 31, 2020, adjusting entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the December 2020 year end adjusting entry for bad debts.

4. Show how the various accounts related to accounts receivable should be shown on the December 31, 2020, balance sheet. (Amounts to be deducted should be indicated with minus sign.)