Answer:
1. $165,000
2. $125,000
3. $170,000
Explanation:
The computation is shown below:
1. Young account $100,000 × 5% = $5,000
Old accounts $400,000 × 40% = $160,000
Allowance for Doubtful Accounts = $165,000
2. The amount which is credited is shown below:
= Allowance for Doubtful Accounts - unadjusted credit balance
= $165,000 - $40,000
= $125,000
3. The amount which is credited is shown below:
= Allowance for Doubtful Accounts + unadjusted debit balance
= $165,000 + $5,000
= $170,000