Chapter $8$ Assignment $1$

M Question $3-$ Chapter $8$ Assignment

$3$

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, $$11,100$; $(2)31$ to $90$ days old, $$4,100$; and $(3)$ more than $90$ days old, $$2,100.$ For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be $(1)6$ percent, $(2)11$ percent, and $(3)25$ percent, respectively. At December $31($end of the current year$),$ the Allowance for Doubtful Accounts balance was $$710($credit$)$ before the end$-$of$-$period adjusting entry is made.

$1\mathrm{.}78$

Required:

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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 $$510$ debit balance, what amount of Bad Debt Expense should be recorded on December $31?$

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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,,,,$],[$Estimated Uncollectible $(\%),,,,],[$Estimated Uncollectible $($$$),,,,]]$

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