Using the aging schedule totals calculated in the previous step $($a$),$ calculate the Allowance for Doubtful Accounts $($AFDA$)$ for each aging category based on the $\%$ uncollectible provided by Sarah. Then, add up the individual AFDA amounts for each aging category to determine the total AFDA.

c$)$ Prepare the journal entry on December $31$st to adjust the allowance for doubtful accounts to the appropriate ending balance. The allowance for doubtful accounts has an unadjusted credit balance of $$4,500.$

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d$)$ Sarah would like to know what allowance for doubtful accounts is and which accounting princigle mandates the use of allowance for doubtful accounts.