Q6. Wilcox Co. Ltd.uses income statement approach to estimate credit losses. The company had 500,000 balance in A/R and an Allowance for Doubtful Accounts balance of 50,000 at the beginning of December 2024. The company recorded 200,000 of credit sales and 100,000 credit collections during December 2024. The company estimates that 4% of credit sales will be uncollectible in December. a) Prepare the adjusting entry to record estimated credit losses at the end of December 2024 using debit (dr) and credit (cr) entries [5 points] b) Calculate the end of December 2024 balance for the A/R account. [5 points] c) Calculate the end of December 2024 balance for the Allowance for Doubtful Accounts. [5 points]

a) To prepare the adjusting entry to record estimated credit losses at the end of December 2024, we need to calculate the estimated uncollectible amount based on the company's credit sales during December.Estimated uncollectible amount = Credit sales * Estimated uncollectible percentageEstimated uncollectible amount = 8,000The adjusting entry would be:Debit: Bad Debt Expense 8,000b) To calculate the end of December 2024 balance for the A/R account, we need to consider the beginning balance, credit sales, and credit collections during December.Beginning balance of A/R = 200,000Credit collections during December = 500,000 + 100,000 = 50,000Adjusting entry = 0 (assuming no write-offs are mentioned in the question)End of December 2024 balance for Allowance for Doubtful Accounts = Beginning balance + Adjusting entry - Write-offsEnd of December 2024 balance for Allowance for Doubtful Accounts = 8,000 - 58,000