Green Pastures Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms \(\mathrm{n} / 60\). The balance of each trade receivable is aged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) 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 are (1) 1 percent, (2) 5 percent, and (3) 30 percent, respectively.

At December 31, 2011 (end of the current accounting year), the trade receivables balance was \(\$ 45,000\), and the unadjusted balance of the allowance for doubtful accounts was \(\$ 1,020\) (credit). To simplify, the accounts of only five customers are used; the details of each follow:

Required:
1. Prepare 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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B. Brown-Trade Receivable Date Explanation 3/11/2010 Sale Debit $13,000 Credit Balance $13,000 6/30/2010 1/31/2011 Collection $4,000 9,000 Collection 3,000 6,000 D. Di Lella-Trade Receivable 2/28/2011 Salc 22,000 22,000 4/15/2011 Collection 10,000 12,000 11/30/2011 Collection 7,000 5,000 N. Gidda- Trade Receivable 11/30/2011 Sale 9,000 9,000 12/15/2011 Collection. 2,000 7,000 S. Kavouris-Trade Receivable 3/2/2009 Sale 5,000 5,000 4/15/2009 Collection 5,000 0 9/1/2010 Sale 10,000 10,000 10/15/2010 Collection 8,000 2,000 2/1/2011 Sale 19,000 21,000 3/1/2011 Collection 5,000 16,000 12/31/2011 Sale 4,000 20,000 T. Patel-Trade Receivable 12/30/2011 Sale 7,000 7,000