Required information P6-3 (Algo) Determining Bad Debt Expense Based on Aging Analysis LO6-2 [The following information applies to the questions displayed below.] 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) 5 percent, (b) 8 percent, and (c) 30 percent, respectively. At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $54,000 and the Allowance for Doubtful Accounts balance was $960 (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, 2019, follow: Date B. Brown-Account Receivable Explanation 03/11/2018 Sale Debit 14,300 Credit Balance 14,300 06/30/2018 Collection 3,100 11,200 01/31/2019 Collection 3,200 8,000 Date 02/28/2019 04/15/2019 11/30/2019 D. Donalds-Account Receivable Explanation Debit Credit Balance Sale 21,700 21,700 Collection 8,500 13,200 Collection 4,800 8,400 N. Napier-Account Receivable Date Explanation 11/30/2019 Sale 12/15/2019 Collection Debit 9,900 Credit Balance 9,900 2,600 7,300 S. Strothers-Account Receivable Date Explanation Debit Credit Balance 03/02/2017 Sale 6,000 6,000 04/15/2017 Collection 6,000 0 09/01/2018 Sale 9,300 9,300 10/15/2018 Collection 4,700 4,600 02/01/2019 Sale 22,900 27,500 03/01/2019 Collection 5,400 22,100 12/31/2019 Sale 2,300 24,400 Date 12/30/2019 T. Thomas-Account Receivable Explanation Sale Debit 5,900 Credit Balance 5,900 P6-3 Part 4 4. Show how the amounts related to accounts receivable should be presented on the 2019 income statement and balance sheet. Complete this question by entering your answers in the tabs below. Income Stat Bal Sheet Show how the amounts related to accounts receivable should be presented on the 2019 income statement. BLUE SKIES EQUIPMENT COMPANY Income Statement (partial) For the Year Ended December 31, 2019 Operating expenses: 4. Show how the amounts related to accounts receivable should be presented on the 2019 income statement and balance sheet. P6-3 Part 4 Complete this question by entering your answers in the tabs below. Income Stat Bal Sheet Show how the amounts related to accounts receivable should be presented on the 2019 balance sheet. (Amounts to be deducted should be indicated by a minus sign.) BLUE SKIES EQUIPMENT COMPANY Balance Sheet (partial) As of December 31, 2019 Current assets: EA 0