Accounting : Ingrid Inc. has strict credit policies and only

Accounting : Ingrid Inc. has strict credit policies and only

Subject: Business    / Accounting
Question

Ingrid Inc. has strict credit policies and only extends credit to customers with outstanding credit history. The company examined its accounts and determined that at January 1, 2018, it had balances in accounts receivable and allowance for doubtful accounts of $478,000 and $7,900 (credit), respectively. During 2018, Ingrid extended credit for $3,075,000 of sales, collected $2,715,000 of accounts receivable, and had customer defaults of $4,280. Ingrid performed an aging analysis on its receivables at year-end and determined that $6,800 of its receivables will be uncollectible.

Required:

1. Calculate Ingrid’s balance in accounts receivable on December 31, 2018, prior to the adjustment.
$=?

2. Calculate Ingrid’s balance in allowance for doubtful accounts on December 31, 2018, prior to the adjustment.

$=?

3. Prepare the necessary adjusting entry for 2018.