You have been provided with the following Aging Report to use to adjust the Allowance for Uncollectible Accounts for a company at year end. Age Group Not yet due 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Accounts Receivable $ 88,000 39,000 26,000 20,000 17,000 $190,000 Estimated Percent Uncollectible 5% 10% 20% 40% 80% Allowance for Uncollectible Accounts 2,000 Credit After reviewing the data, you note the 'not yet due category is overstated by 20%, while the 'Over 90 days' category is understated by 20%, (this error also caused the AR balance on the schedule to not equal the amount of Accounts Receivable on the balance sheet). Also, you note the balance in the Allowance account is actually a debit, rather than a credit. Being that the normal balance for this account is a credit, the accountant hadn't noticed the issue. Required: 1. Use your spreadsheet to recalculate the needed adjustment and account balances. What will be the balance in Accounts Receivable and the Allowance for Uncollectible Accounts based on the above information? Accounts Receivable Allowance for Uncollectible Accounts 2. Prepare the journal entry to adjust the Allowance for Uncollectible Accounts, using your corrected data. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" In the first account field.) View transaction list Journal entry worksheet Record the bad debt expense for the period based on the estimate of uncollectible accounts. Note: Enter debits before credits. Transaction Debit Credit General Journal Bad Debt Expense Allowance for Uncollectible Accounts Record entry Clear entry View general journal 3. Which statement is true regarding the effect of the Allowance account being shown incorrectly as a credit rather than as a debit balance in the original account analysis? The error caused the journal entry to require a credit to Bad Debts Expense rather than a debit. Correcting the error increased the amount of Bad Debt Expense recorded for the period. Correcting the error decreased the amount of Bad Debt Expense recorded for the period The Allowance account and the adjustment were not affected by the original misstatement, as it was only an estimate