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 $160,000 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 $80,000, aged as follows: (1) 130 days old, $65,000; (2) 3190 days old, $12,000; and (3) more than 90 days old, $3,000. 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 $1,100 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.

nnovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $160,000 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 $80,000, aged as follows: (1) 1-30 days old, $65,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,000 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 $1,100 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. 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 entry Clear entry View general journal Required 1Required 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 $80,000, aged as follows: (1) 1-30 days old, $65,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,000. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Show lessA 1-30 31-90 90 Tota Accounts Receivable Estimated Uncollectible (%) Estimated Uncollectible ($) Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,100 credit balance at December 31. Prepare the December 31 adjusting entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first 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 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below Required 1Required 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