P$6-3($Algo$)$ Determining Bad Debt Expense Based on Aging Analysis LO$6-2$

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Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n$/60.$ The balance of each account receivable is aged on the basis of three time periods as follows: $(1)$ not yet due, $(2)$ up to one year past due, and $(3)$ more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year$-$end due to uncollectibility is $($a$)2$ percent, $($b$)7$ percent, and $($c$)29$ percent, respectively.

At December $31,2022($end of the current accounting year$),$ the Accounts Receivable balance was $$50,200$ and the Allowance for Doubtful Accounts balance was $$1,020($credit$).$ In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December $31,2022,$ follow: