Caslda Company uses the aging approach to estimate bad debt expense. The ending

Question

Caslda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time perlods as follows: (1) not yet chun, $50,200, (2)up to 180 days pest due. $15,100, and (3) more than 180 days past due, $5,400. Experience has shown that for each age group, the average loss rate on the amount of the recelva percent, (2) 11 percent, and (3)31 percent, respectively. At December 31, end of the current year, the Allowance for Doubelul Accounts balance is $300 (reait before the end-of-perñod adjusing eniry s mae l ables at year end due to uncollectbility is (1)3 Required: 1. Prepare the appropriate bad debt expense adjusting journal entry for the current year. Oif no entry is required for a transactionievent, View t Journal entry worksheet Record the adjusting journal entry for bad debt e Enter debits befere credits View general journal Record entry 26 8 7 9 8 5 6

Explanation / Answer

Amount Estimated % Uncollectible Estimated Amount Uncollectible Not Yet Due            50,200.00 3%                         1,506.00 Up to 180 Days past due            15,100.00 11%                         1,661.00 Over 180 Days past due               5,400.00 31%                         1,674.00 Total Estimated Amount Uncollectible                         4,841.00 Balance in Allowance for Doubtful Accounts                            300.00 Bad Debt Expense                         4,541.00 Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec Bad Debts Expense    4,541.00    Allowance for Doubtful Accounts    4,541.00 (To record the bad debt Expense)

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