Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate.

Required:

1) If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts?

2) If YOCs Allowance for Doubtful Accounts currently has an unadjusted credit balance of $40,000, how much should be credited to the account?

3) If YOCs Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, how much should be credited to the account?

1. Amount to be Reported?

2. Amount to be Credited?

3. Amount to be Credited?