Question
Lazer, Inc. reports the following aging schedule for accounts receivable at December 31, 2018. Probability Days outstanding Amount of collection 0 30 $87,500 98% 31
- Lazer, Inc. reports the following aging schedule for accounts receivable at December 31, 2018.
Probability
Days outstanding Amount of collection
0 30 $87,500 98%
31 60 $13,500 68%
61 90 $9,300 30%
over 91 $2,400 5%
During 2018 gross sales were $250,000. Eighty five percent of gross sales were credit sales. Management estimates that 5% of credit sales will be uncollectible. The current balance in the Allowance for Doubtful Accounts is $4,600 (credit) on December 31, 2018 prior to recording the bad debt expense adjustment. What amount of bad debt expense should Phillip record at the end of 2018 using the Accounts Receivable Aging method?
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