E$6-14($Algo$)$ Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO$6-2$

Casilda 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 periods as follows: $(1)$ not yet due, $$50,400$; $(2)$ up to $180$ days past due, $$14,600$; and $(3)$ more than $180$ days past due, $$4,400.$ Experience has shown that for each age group, the average loss rate on the amount of the receivables at year$-$end due to uncollectibility is $(1)3$ percent, $(2)12$ percent, and $(3)31$ percent, respectively. At December $31,$ the end of the current year, the Allowance for Doubtful Accounts balance is $$500($credit$)$ before the end$-$of$-$period adjusting entry is made.

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