On July 31, 2020, the companys year end, Anta Drilling had account balances as follows:

Accounts receivable $327500

Allowance for doubtful accounts (before adjusting entry) $5200 credit balance

The credit department has determined that of the total accounts receivable, $6000 should be written off. Anta estimates 95% of remaining accounts receivable will be collected.

Instructions

1. Prepare the entry to write off the accounts as determined by the credit department
2. Using the Balance Sheet (% Receivables) Method, calculate the appropriate value of the Allowance for Doubtful Accounts. Show your calculation.
3. Prepare the appropriate adjusting entry.