The following information pertains to Lightning, Inc. at the end of December: Cr
ID: 2461458 • Letter: T
Question
The following information pertains to Lightning, Inc. at the end of December:
Credit Sales $20,000
Accounts Payable 10,000
Accounts Receivable 11,900
Allowance for Uncollectible Accounts $400
credit Cash Sales 20,000
Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 12% of receivables less than 30 days past due, and 48% of receivables greater than 30 days past due. The accounts receivable balance of $11,900 consists of $7,000 not yet due, $3,000 less than 30 days past due, and $1,900 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense?
Explanation / Answer
accounts receivable not yet due receivables less than 30 days past due receivables greater than 30 days past due Total accounts not receivables Estimated not collectible $1400 (7%) 2400 (12%) 9600 (48%) $13400 Carried in Accounts Receivables $7000 3000 1900 $11900 The appropriate amount of Bad Debt Expense $1500
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