III. Accounts Receivable, and Accounting for Bad Debt Expense/Allowance for Doubtful Accounts

A company using the Aging Method of accounting for Receivables has developed a fairly reliable Receivables Analyzer, and has sorted and input its year-end Receivables as follows on 12/31/xx:

Age Amount % at Risk $ at Risk

Current $12,000 1% $120

0-30 $ 1,500 4% $ 60

31-60 $ 1,000 10% $ 100

61-90 $ 600 40% $ 240

>90 $ 400 70% $ 280

1. If on a Trial Balance basis (i.e., before any year-end adjustment the Analyzer would direct) its Allowance for Doubtful Accounts account shows a Debit (Dr.) balance of $110, how much will the company record as Bad Debt Expense for the year?

2. If, on the other hand, the pre-adjustment Trial Balance in ADA shows a Credit (Cr.) balance of $82, how much Bad Debt Expense would the company recognize for the year?