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, ITI sold services on account for $140,000 and estimated that ¹/₂ of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $86,800, aged as follows: (1) 130 days old, $73,000; (2) 3190 days old, $10,000; and (3) more than 90 days old, $3,800. Experience has shown that for each age group, the average rate of uncollectibility is (1) 10 percent, (2) 20 percent, and (3) 40 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,500 credit balance at December 31.

Required:

1.

Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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

	130	3190	> 90	Total
Accounts Receivable				$0
Estimated Uncollectible (%)
Estimated Uncollectible ($)				$0

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.)

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