Nipomo Widget reviewed the following information from its accounting records for theyear ended December 31, 2011, before adjustment:

Sales during 2011 $800,000

Credit Sales are 80% of sales

Collections from customers in 2011 590,000

Accounts Receivable 165,000

Allowance for Uncollectible Accounts

(before adjustment)

2,050 credit

Nipomo Widget uses the percent-of-sales method, at 1.5%, to estimate uncollectible accounts for 2011.

The president of the company wants to change to the aged accounts receivable method and estimates $7,500 as the uncollectible amount for 2011.

For each method of determining the estimate amount, you are to provide:

1. the adjusting Journal entry.

2. the ending balance in the Allowance account.

3. the net realizable value of accounts receivable.