At the end of 2019, MacGyver Industries recorded sales for the year of $750,000 of which 80% were credit sales. The year-end balance in accounts receivable was $145,000. The Allowance for Doubtful Accounts had a beginning balance as of January 1, 2019 of $13,500. During 2019, MacGyver Industries wrote off $18,000 of accounts receivable. Bad debt expense can be estimated at 1.5% of credit sales or by using the aging method. The following aging analysis of Accounts Receivable was prepared at December 31, 2019:

Age Classification	12/31/19 $ Amount	Estimated % Uncollectible
Current/not yet due	100,000	1%
1-30 days past due	14,000	4%
31-60 days past due	9,000	6%
61-90 days past due	6,000	15%
over 90 days past due	15,000	30%
Total	$145,000

Required:

1. Determine the bad debt expense for the year ended December 31, 2019, assuming MacGyver Industries used the (a) percentage of credit sales method and (b) the aging method. [2 marks]
   1. Percentage of credit sales method.

b)Aging method.

2. Determine the year-end December 31, 2019 balance in the Allowance for Doubtful Accounts using the (a) percentage of credit sales method and (b) the aging method [2 marks]
   1. Percentage of credit sales method.

2. Aging Method

3.Prepare the December 31, 2019 adjusting entry using the aging method to estimate bad debts [1 mark]

3. Briefly explain why the two different methods result in different bad debt expense. [2 marks]

4. Included in the 2019 write offs of $18,000 was Jackson Ltds balance owing of $5,600. On January 17, 2020, MacGyver received a cheque from Jackson Ltd in the amount of $3,600 in partial payment of their amount owing. Prepare the journal entry(ies) to record this payment.

[2 marks]