Question
Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and
Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period:
Accounts Receivable Age | Amount | Proportion Expected to Default | ||
Current | $19,800 | 0.01 | ||
115 days past due | 5,300 | 0.02 | ||
1645 days past due | 3,100 | 0.08 | ||
4690 days past due | 3,600 | 0.15 | ||
Over 90 days past due | 2,400 | 0.30 | ||
$34,200 |
1. Determine the desired postadjustment balance in allowance for doubtful accounts. $fill in the blank
2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. $fill in the blank
3. Compute bad debt expense.
fill in the blank
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started