innovative tech incorporated (iti) has been using the percentage of credit sales method to estimate bad debts. during november, iti sold services on account for $150,000 and estimated that 1/4 of 1 percent of those sales would be uncollectible. required: prepare the november adjusting entry for bad debts. starting in december, iti switched to using the aging method. at its december 31 year-end, total accounts receivable is $83,400, aged as follows: (1) 1 to 30 days old, $69,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $3,400. the average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. prepare a schedule to estimate an appropriate year-end balance for the allowance for doubtful accounts. before the end-of-year adjusting entry is made, the allowance for doubtful accounts has a $1,300 credit balance at december 31. prepare the december 31 adjusting entry. show how the various accounts related to accounts receivable should be shown on the december 31 balance sheet.
