On January 1, 2018, Accounts Receivable had a balance of $2,300,000, and the Allowance for Bad Debt had a credit balance of $22,000. During 2018, sales on account totaled $5,600,000 and collections were $5,750,000. There $150,000 in Returns and Allowances during the year and accounts of $23,500 were written off.

1. Determine the balances in Accounts Receivable and the Allowance accounts on December 31, 2018, before the adjustment for the annual bad debit estimate.

2. Using the % of net credit sales method, prepare the adjusting entry to record the expense and determine the ending balance in the Allowance account. Historically, the company uses 0.5% as its bad debt estimate.

3. Using the aging of receivables method, prepare the adjusting entry to record the expense and determine the ending balance in the Allowance account. An aging of receivables determines that $28,000 is uncollectible.