Problem 2 Allowance for Uncollectible Accounts (22 points) Kelly Klothing Designs started the current year with the following account balances related to its customers accounts: Accounts receivable Allowance for uncollectible accounts $560,000 105,000 credit balance Kelly reported credit sales of $1,253,000 for the current year and recorded sales returns and allowances of $41,200 (sales value). Assume all sales were on account. The company collected $1,115,000 on accounts and determined that a $35,000 account due from Cruze Company was uncollectible. The company applies the allowance method to estimate uncollectible accounts. Required 1. Prepare the journal entries required for each of the following events: a. The write-off of the Cruze Company account. b. The current year's provision for bad debts assuming Kelly estimates bad debts at 15% of ending balance of accounts receivable. 2. Indicate how accounts receivable would be reported on Kelly's balance sheet at the end of the year