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) 13 percent, and (c) 34 percent, respectively. At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $49,100 and the Allowance for Doubtful Accounts balance was $940 (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 03/11/2018 06/30/2018 01/31/2019 B. Brown-Account Receivable Explanation Sale Debit 13,500 Credit Balance 13,500 Collection 4,000 9,500 Collection 4,400 5,100 D. Donalds-Account Receivable Date Explanation 02/28/2019 Sale 04/15/2019 Collection 11/30/2019 Collection Debit 22,000 Credit Balance 22,000 8,100 13,900 4,500 9,400