Required 1:

1. Prepare a schedule to estimate an appropriate vear-end balance for the Allowance for Doubtful Accounts.
2. What amount of Bad Debt Expense should be recorded on December 31?
3. If the unadjusted balance in the Allowance for Doubtful Accounts was a $600 debit balance, what amount of Bad Debt Expense should be recorded on December 31?

Required 2:

1. Assume Kraft Heinz uses of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year (rounded to the nearest million), assuming no Bad Debt Expense has been recorded yet.
2. Assume instead Kraft Heinz uses the aging of accounts receivable method and estimates that $80 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense.
3. Repeat requirement 2, except this time assume the unadjusted balance in Kraft Heinz's Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $20.
4. If one of Kraft Heinz's customers declared bankruptcy, what journal entry would be used to write off its $15 balance?

M8-2 EVALUATING THE DECISION TO EXTEND CREDIT LO 8-1 Last year, Pastis Productions reported $100,000 in sales and $40,000 in cost of goods sold. The company estimates it would have doubled its sales and cost of goods sold had it allowed customers to buy on credit, but it also would have incurred $50,000 in additional expenses relating to wages, bad debts, and interest. Should Pastis Productions extend credit? E8-7 COMPUTING BAD DEBT EXPENSE USING AGING OF ACCOUNTS RECEIVABLE METHOD LO 8-2 Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1-30 days old, $12,000; (2) 31-90 days old, $5,000; and (3) more than 90 days old, \$3,000. For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be (1) 5 percent, (2) 10 percent, and (3) 20 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Aceounts balance was $800 (eredit) before the end-of-period adjusting entry is made. Required: 1. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 2. What amount of Bad Debt Expense should be recerded on December 31? 3. If the unadjusted balance in the Allowance for Doubtful Accounts was a 5600 debit balance, what amount of Bad Debt Expense should be recerded on December 31 ? PAB-1 Recording Accounts Receivable Transactions Using the Aging Method o 8.2 The Krat Heinz Company was formed in 2015 with the merzet of Kraft Foods ans H. J. Heinz Corpocation. The compuny reported the following rounded amounts for the year endod Decemiter 29.2018 (all amovots in millieos): The Kratt Hoinz Company Required: Pare 3x7 1. Assume Kraft Heinz uses 15 of 1 percent of sales to estimate ins Bud Debe Expense fict the year. Prepare the adjusting jourmal eniry required for the year (rounded to the nearest million), assuming no Bad Debe Eypense has beea reconded yet. 2. Assume isstead Kraft Heinz uses the aging of accoents receivalle method and estinutes that 550 of its Accounts Roceivable will be uncollectible. Prepare the adjusting journal eatry required at December 29, 201k, foe rocoefias Bad Debt Expense. 3. Repeat requirement 2, except this time asseme the unudfusted talance in Krat Hein's's Allowance for Doubtful Accounts a December 29. 2018, was a debit balance of $20. 4. If one of Kraft Heinr's customers declared bankruptc), what joarnal catry would be med to wrike off its $15 balance