Estimating Bad Debts Expense and Reporting of Receivables At December 30, 2013, Equinox Company had a balance of $600,000 in its accounts receivable and an unused (unadjusted year-end)balance of $6,720 in its allowance for uncollectible accounts. The company then aged its accounts as follows:

Current	$486,400
0-60 days past due	70,400
61-180 days past due	28,800
Over 180 days past due	14,400
Total accounts receivable	$600,000

The company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 40% of balances over 180 days past due. The company continues to base its provision for credit losses on this aging analysis and percentages. a. What amount of bad debts expense does Equinox report on its 2013 income statement? $Answer b. Show how accounts receivable and the allowance for uncollectible accounts are reported in its December 30, 2013, balance sheet.

Current Assets:
Accounts receivable	Answer
Less: Allowance for uncollectible accounts	Answer
Accounts receivable, net	Answer

c. Set up T-accounts for both Bad Debts Expense and for the Allowance for Uncollectible Accounts. Enter any unadjusted balances along with the dollar effects of the information described (including your results from parts a and b).

Bad Debts Expense (E)
Balance	Answer	Answer
a.	Answer	Answer
Balance	Answer	Answer

Allowance for Uncollectible Accts. (XA)
Balance	Answer	Answer
a.	Answer	Answer
Balance	Answer	Answer