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Smith Company shows the following information on December 31, 2019, the companys fiscal year-end: Account Debit Credit Accounts receivable $17,000 Allowance for doubtful accounts 400

Smith Company shows the following information on December 31, 2019, the companys fiscal year-end: Account Debit Credit

Accounts receivable $17,000

Allowance for doubtful accounts 400

Sales ($5,000 of cash sales) $75,000

The companys accountant generated the following aging schedule of accounts receivable:

Number of Days Outstanding Amount Receivable Estimated Uncollectible

0-30 days $10,000 1%

31-60 days 4,000 5%

61-90 days 2,000 10%

Over 90 days 1,000 25%

Required:

a.) Prepare the adjustment to allowance for doubtful accounts based on the information above.

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