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question is in the picture E6-13 (Algo) Computing Bad Debt Expense Using Aging Analysis L06-2 Lin's Dairy uses the aging approach to estimate bad debt
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E6-13 (Algo) Computing Bad Debt Expense Using Aging Analysis L06-2 Lin's Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $16,700: (2) up to 120 days past due, $7,000; and (3) more than 120 days past due, $4,400. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 1 percent, (2) 13 percent, and (3) 36 percent, respectively. At the end of the current year, the Allowance for Doubtful Accounts balance is $800 (credit) before the end-of-period adjusting entry is made. Required: What amount should be recorded as Bad Debt Expense for the current year? (Enter your answers as a whole percentage (l.e., 0.12 should be entered as 12).) Aged Accounts Receivable Estimated Percentage Uncollectible Estimated Amount Uncollectible % Not yet due Up to 120 days past due Over 120 days past due % % Step by Step Solution
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