Molina Company had a $700 credit balance in Allowance for Doubtful

| June 14, 2018

Molina Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2014, before the current year’s provision for uncollectible accounts. An aging of the accounts receivable revealed the following:Estimated PercentageUncollectibleCurrent Accounts $120,000 1%1–30 days past due 20,000 3%31–60 days past due 10,000 6%61–90 days past due 10,000 12%Over 90 days past due 8,000 30%Total Accounts Receivable $168,000(a) Prepare the adjusting entry on December 31, 2014, to recognize bad debt expense.(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $500 debit balance before the current year’s provision for uncollectible accounts. Prepare the adjusting entry for the current year’s provision for uncollectible accounts.(c) Assume that the company has a policy of providing for bad debts at the rate of 1% of sales, that sales for 2014 were $550,000, and that Allowance for Doubtful Accounts had a $650 credit balance before adjustment. Prepare the adjusting entry for the current year’s provision for bad debts.

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