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Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of...

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Accounting

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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, $12,500; (2) 31-90 days old, $5,500; and (3) more than 90 days old, $3,500 For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be (1) 4 percent, (2) 12 percent, and (3) 15 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance was $850 (credit) before the end-of-period adjusting entry is made

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