Miller, Inc., analyzed its accounts receivable balances at December $31$ and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:

Age Group

Balance Probability of

Noncollection

$030$ days past due $$180,0001\%$

$3160$ days past due $40,0004\%$

$61120$ days past due $22,0005\%$

$121180$ days past due $14,00012\%$

Over $180$ days past due $8,00025\%$

$$264,000$

The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $$1,150$ on December $31,$ before any adjustments.

Prepare the adjusting entry for estimated credit losses on December $31.$

Prepare the journal entry to write off the Lyons Companys account on April $10$ of the following year in the amount of $$575.$

a$.$

General Journal

Date Description Debit Credit

Dec$\mathrm{.}31$ Answer

Bad Debts Expense

Answer

$6,350$

Answer

$0$

Answer

Allowance for Doubtful Accounts

Answer

$0$

Answer

$6,350$

To record allowance for credit losses.

b$.$

General Journal

Date Description Debit Credit

April $10$ Answer

Allowance for Doubtful Accounts

Answer

$525$

Answer

$0$

Answer

Accounts Receivable $-$ Lyons Company

Answer

$0$

Answer

$525$

To write off Lyons Company's account.