As the recently appointed controller of Lynbrook, you would like to begin using the aging method to determine the ending balance in the Allowance for Doubtful Accounts. Your accounting staff provided you with the following aging schedule for Lynbrook’s accounts receivable at December 31, 2019:
Accounts Receivable Amount Proportion Expected to Default

0-30 days 225,000$ 0.03

31-60 65,000 0.10

61-90 35,000 0.15

Over 91 days 10,000 0.45

335,000$
Required:
If the unadjusted balance in allowance for doubtful accounts was a debit of $2,500, prepare an answer the following questions:

1. Prepare the adjusting journal entry to record the bad debt expense.
2. Determine the Net Accounts Receivable (Net Realizable Value) amount that will be reported in the December 31, 2019 Balance Sheet.

Answer rating: 100% (QA)

1 To record the bad debt expense using the aging method we need to calculate the estimated amount of ... View the full answer