P6-3 (Algo) Determining Bad Debt Expense Based on Aging Analysis LO6-2 [The following information applies to the questions displayed below.) Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n/60. The balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectibility is (a) 2 percent, (b) 9 percent, and (c) 31 percent, respectively. At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $51,600 and the Allowance for Doubtful Accounts balance was $1,080 (credit). In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December 31, 2019, follow: Date 03/11/2018 06/30/2018 01/31/2019 B. Brown-Account Receivable Explanation Sale Debit 13,900 Credit Balance 13,900 Collection 3,400 10,500 Collection 4,500 6,000 D. Donalds-Account Receivable. Date: Explanation 02/28/2019 04/15/2019 11/30/2019 Sale Collection Collection Debit 21,400 Credit Balance 21,400 7,500 13,900 4,900 9,000 N. Napier-Account Receivable) Date: Explanation Debit Credit Balance Date 11/30/2019 12/15/2019 N. Napier-Account Receivable Explanation Sale Debit 8,400 Credit Balance 8,400 Collection 1,300 7,100 S. Strothers-Account Receivable Date: Explanation Debit Credit Balance 03/02/2017 Sale 5,500 5,500 04/15/2017 Collection 5,500 09/01/2018 Sale 10,200 10,200 10/15/2018 Collection 4,000 6,200 02/01/2019 Sale 22,500 28,700 03/01/2019 Collection 7,300 21,400 12/31/2019 Sale 3,300 24,700 Date 12/30/2019 T. Thomas-Account Receivable Explanation Sale Debit 4,800 Credit Balance 4,800 P6-3 Part 1 Required: 1. Compute the total accounts receivable in each age category. Not yet due Up to one year past due More than one year past due Total accounts receivable Amount 69 $ 0 P6-3 Part 2 2. Compute the estimated uncollectible amount for each age category and in total. Not yet due Up to one year past due More than one year past due Total Amount Journal entry worksheet < 1 Record the adjusting entry for bad debt expense at December 31, 2019. Note: Enter debits before credits. Transaction A General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Income Stat Bal Sheet Show how the amounts related to accounts receivable should be presented on the 2019 income statement. BLUE SKIES EQUIPMENT COMPANY Income Statement (partial) For the Year Ended December 31, 2019 Operating expenses: Income Stat Bal Sheet > Complete this question by entering your answers in the tabs below. Income Stat Bal Sheet Show how the amounts related to accounts receivable should be presented on the 2019 balance sheet. (Amounts to be deducted should be indicated by a minus sign.) BLUE SKIES EQUIPMENT COMPANY Balance Sheet (partial) As of December 31, 2019 Current assets: Income Stat Bal Sheet>