(a) Compute the bad debt expense for the year 2011. ...
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Accounting
(a) Compute the bad debt expense for the year 2011.
(b) What is the net book value of Accounts Receivable to be reported on the Balance Sheet as of December 31, 2011?
The Ted Company 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) Not yet due $85,000; (2) up to 90 days past due $60,000, and (3) more than 90 days past due $4,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectible is (1) 3 percent, (2) 12 percent, and (3) 30 percent, respectively. On December 31, 2011 (end of the current year), the Allowance for Doubtful Accounts had a $150 credit balance before the end-of-period adjusting entry is made
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