Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November 2013, ITI sold services on account for $100,000 and estimated that ¹/₄ of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $91,100, aged as follows: (1) 130 days old, $76,000; (2) 3190 days old, $11,000; and (3) more than 90 days old, $4,100. Experience has shown that for each age group, the average rate of uncollectibility is (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,650 credit balance at December 31, 2013.

Record the adjusting entry for bad debts as of December 31, 2013.

Show how the various accounts related to accounts receivable should be shown on the December 31, 2013, balance sheet.