P6-6 Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios LO6-4 IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30, 2020: April 10: Received an order from Peter's Appliances, a wholesaler, for 50 machines. April 30: Sold 75 machines to Yuri Inc. on credit. May May May May Pay June 1: The purchasing manager of Peter's Appliances visited Icekreme's factory and purchased 54 machines on credit, instead of the 50 machines that were previously ordered. 5: Yuri Inc. paid for the machines purchased on April 30. 7: Sold 20 machines to Cheng Ltd. on credit. 10: Wrote off $14,000 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1, 2020. 15: Peter's Appliances returned two defective machines and paid the amount due. 1: Received $128,000 from Cheng Ltd. on account. June 30: Recovered $4,400 from the receivables that were written off on May 10. Additional information is as follows: IceKreme sold all machines at $8,000 per unit. All of IceKreme's sales were on credit with terms 2/10, n/30. IceKreme's records included the following items and their balances as at March 31, 2020. Accounts receivable Allowance of doubtful accounts (credit balance) Net sales $ 88,000 20,400 880,000 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.) Aging of accounts receivable. Not yet Estimated % uncollectible due 5% 1-30 days past due 31-60 days past due Over 60 days past due 10% 15% 20% a Determine the amount of receivables that may not be collectible in the future as on June 30, 2020 Amount of uncollectible