60.1K

Verified Solution

Link Copied!

Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November, ITI sold services on account for $150,000 and estimated that 1/2 of one percent of those sales would be uncollectible At its December 31 year-end, total Accounts Receivable is $83,500, aged as follows: (1) 1-30 days old, $70,000; (2) 31-90 days old, $10,000; and (3) more than 90 days old, $3,500. Experience has shown that for each age group, the average rate of uncollectibility is (1) 10 percent, (2) 20 percent, and (3) 40 percent, respectively. Before the end of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,350 credit balance at December 31. Required 1. Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for bad debts as of November 30. Note: Enter debits before credits. Date General Journal Debit Credit Nov 30 Record entry Clear entry View general journal Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts 2. 30 1-90 > 90 Accounts Receivable

Answer & Explanation Solved by verified expert

See Answer