Innovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $150,000 and estimated that 3/4 of 1 percent of those sales would be uncollectible Required 1. Prepare the November adjusting entry for bad debts. 2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $83,300, aged as follows: (1) 1-30 days old, $68,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,300. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year- end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,250 credit balance at December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts related to accounts receivable should be shown on the December 31 balance sheet. Required 1 Required 2 Required 3 Required 4 Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, sel in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for bad debts as of November 30 Note: Enter debits before credits Date General Journal Debit Credit November 30 Record ent Clear entr View general journal Required1 Required 2 Required 3 Required 4 Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $83,300, aged as follows: (1) 1-30 days old, $68,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,300 The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Show less A 1-30 31-90 > 90 Total Accounts Receivable Estimated Uncollectible (%) Estimated Uncollectible (S) Required 1 Required 3 Required 1 Required 2Required 3 Required 4 Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,250 cre Prepare the December 31 adjusting entry. (If no entry is required for a transaction/event, select "No J account field.) View transaction list Journal entry worksheet Record the adjusting entry for bad debts as of December 31. Note: Enter debits before credits. Date General Journal Debit Credit December 31 ecord ent Clear Required 1 Required 2 Required 3 Required 4 Show how the various accounts related to accounts receivable should be shown on the December 31 balance sheet. Innovative Tech Inc. (ITI) Balance Sheet (partial) At December 31 Required 3 Required 4
