P5-6 (Algo) Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios L05-3, 5-4 IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30 of the current year: April 10 Received an order from Peter's Appliances, a wholesaler, for 10 machines. April 30 Sold 15 machines to Yuri Inc. on credit. May 1 The purchasing manager of Peter's Appliances visited IceKreme's factory and purchased 12 machines on credit, instead of the 10 machines that were previously ordered. May 5 Yuri Inc. paid for the machines purchased on April 30. May 7 Sold 2 machines to Cheng Ltd. on credit. May 10 Wrote off $13,700 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1 of the current year. May 10 Peter's Appliances paid the amount due to IceKreme. June 30 Recovered $3,850 from the receivables that were written off on May 10. Additional information is as follows: - IceKreme sold all machines at $18,500 per unit. - All of IceKreme's sales were on credit with terms n/30. - IceKreme's records included the following items and their balances as at March 31 of the current year: Required: 1. Prepare the journal entries to record the transactions that occurred from April 1 to June 30 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: (Hint: Use a timeline to keep track of accounts receivable in order to determine the age of these receivables.) a. Determine the amount of receivables that may not be collectible in the future as on June 30 of the current year. b. Prepare the journal entry to record bad debt expense at June 30 of the current year, the company's fiscal year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the bad debt expenses estimated for the period. Note: Enter debits before credits