Novakowski Products needs to prepare their year-end financial statements. On December 31, 2021, the balance in Accounts Receivable was $680,000. An aging analysis of the accounts receivable indicated that $16,500 of the accounts receivable is expected to be uncollectible.

Instructions:

a) Make the adjusting entries to record estimated bed debt expense using the percentage of receivables approach for each independent assumption:

i) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment.

ii)Allowance for Doubtful Accounts has a debit balance of $730 before adjustment.

b) Determine the carrying amount of the accounts receivable at December 31, 2021 after the required adjustments under each assumption.