E8-7 Computing Bad Debt Expense Using Aging of Accounts Receivable Method [LO 8-2] Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1-30 days old, $11,500; (2) 31-90 days old, $4,500; and (3) more than 90 days old, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivable due to uncollectibility is (1) 5 percent, (2) 10 percent, and (3) 20 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance was $750 (credit) before the end-of-period adjusting entry is made. Required 1. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts 1-30 31-90 90 Total Accounts Receivable Estimated Uncollectible (%) Estimated Uncollectible ($) 2. What amount of Bad Debt Expense should be recorded on December 31? mount of Bad Debt Expense 3. If the unadjusted balance in the Allowance for Doubtful Accounts was a $550 debit balance, what amount of Bad Debt Expense should be recorded on December 31? Amount of Bad Debt Expense