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Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced

Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings.

a. Not yet due $ 300,000
b. 130 days past due 126,000
c. 3160 days past due 48,000
d. 6190 days past due 9,000
e. Over 90 days past due 18,000
Total $ 501,000

On the basis of past experience, the company estimated the percentages probably uncollectible for the five age groups to be as follows: Group a, 1 percent; Group b, 3 percent; Group c, 10 percent; Group d, 20 percent; and Group e, 50 percent.

The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit balance of $7,080.

Required: b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount.

c. Assume that on January 10 of the following year, Putnam & Putnam learned that an account receivable that had originated on September 1 in the amount of $5,160 was worthless because of the bankruptcy of the client, Safeland Co. Prepare the journal entry required on January 10 to write off this account.

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