90.2K

Verified Solution

Link Copied!

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: $(1)1$ to $30$ days old, $$12,900$; $(2)31$ to $90$ days old, $$5,900$; and $(3)$ more than $90$ days old, $$3,900.$ For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be $(1)5$ percent, $(2)10$ percent, and $(3)15$ percent, respectively. At December $31($end of the current year$),$ the Allowance for Doubtful Accounts balance was $$890($credit$)$ before the end$-$of$-$period adjusting entry is made.

Required:

Prepare a schedule to estimate an appropriate year$-$end balance for the Allowance for Doubtful Accounts.

What amount of Bad Debt Expense should be recorded on December $31?$

If the unadjusted balance in the Allowance for Doubtful Accounts was a $$690$ debit balance, what amount of Bad Debt Expense should be recorded on December $31?$

Complete this question by entering your answers in the tabs below.

Required $3$

Prepare a schedule to estimate an appropriate year$-$end balance for the Allowance for Doubtful Accounts.

$\backslash$table$[[,1$ to $30,31$ to $90,$Over $90,$Total$],[$Accounts Receivable,,,,$$,0],[$Estimated Uncollectible $(\%),,,,,],[$Estimated Uncollectible $($$$),,,,$$$,0]]$

Answer & Explanation Solved by verified expert

See Answer