On December 31, 2011, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:

Accounts receivable $25,000 Allowance for doubtful accounts 200 (credit) Sales revenue (all credit sales) 400,000 Requirements: Present the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions:

1. An aging of accounts receivable is completed. It is estimated that $5,000 of the receivables outstanding at year-end will be uncollectible.

2. Assume the same information presented in part 1. Except that prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.