Sullivan Co.'s accounts receivable show the following balances by age:
|
Age of Receivable
|
Balance
|
|
0-30 days
|
$600,000
|
|
31-60 days
|
175,000
|
|
61-120 days
|
70,000
|
|
more than 120 days
|
10,000
|
The credit balance in the allowance for uncollectible accounts is $2,500. Sullivan Co. uses the following percentages to compute the estimated amounts of receivables that will eventually prove uncollectible: 0-30 days, 0.7%; 31-60 days, 1.2%; 61-120 days, 11%; and more than 120 days, 65%.
Required:
- Prepare the adjusting journal entry.
- Please show work.