Briggs \& Stratton Engines Inc. uses the aging approach to estimate bad debt expense at the end of each fiscal year. Credit sales occur frequently on terms \(n / 45\). The balance of each trade receivable is aged on the basis of four time. periods as follows: (1) not yet due, (2) up to 6 months past due, (3) 6 to 12 months past due, and (4) more than one year past due. Experience has shown that for each age group, the average bad debt rate on the amounts receivable at year-end due to uncollectibility is (1) 1 percent, (2) 5 percent, (3) 20 percent, and (4) 50 percent, respectively.

At December 31, 2011 (end of the current fiscal year), the trade receivables balance was \(\$ 39,500\), and the allowance for doubtful accounts balance was \(\$ 1,550\) (debit). To simplify, the accounts of only five customers are used; the details of each follow:

Required:
1. Set up an aging analysis schedule and complete it.
2. Compute the estimated uncollectible amount for each age category and in total.
3. Prepare the adjusting entry for bad debt expense at December 31, 2011.
4. Show how the amounts related to trade receivables should be presented on the income statement for 2011 and the statement of financial position at December 31, 2011.

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Date Explanation Debit Credit Balance R. Aouad-Trade Receivable 3/13/2011 Salc $19,000 $19,000 5/12/2011 Collection $10,000 9,000 9/30/2011 Collection 7,000 2,000 C. Chronis-Trade Receivable 05/01/2010 Sale 31,000 31,000 11/01/2010 Collection 20,000 11,000 12/01/2011 Collection 5,000 6,000 D. McClain-Trade Receivable 10/31/2011 12/10/2011 Sale 12,000 12,000 Collection 8,000 4.000 T. Skibinski-Trade Receivable 05/02/2011 Sale 15,000 15,000 05/01/2011 Sale 10,000 25,000 06/15/2011 07/15/2011 Collection Collection 15,000 10,000 10,000 0 10/01/2011 Sale 26,000 26,000 11/15/2011 Collection 16,000 10,000 12/15/2011 Salc 4,500 14,500 H. Wu-Trade Receivable 12/30/2011 Sale 13,000 13,000