P6-6 Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios L06-4 IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30, 2020: May May April 10: Received an order from Peter's Appliances, a wholesaler, for 34 machines. 1: The purchasing manager of Peter's Appliances visited IceKrene's factory and purchased 36 machines on credit, instead of the 34 machines that were previously ordered. 5: Yuri Inc. paid for the machines purchased on April 30. 7: Sold 20 machines to Cheng Ltd. on credit. 10: Wrote oft $15,000 of accounts receivable that were considered uncollectible. These receivables relate to sales 15: Peter's Appliances returned two defective machines and paid the amount due June 1: Received $96,000 from Cheng Ltd. on account. June 30: Recovered $3,600 from the receivables that were written off on May 10. May May May Additional information is as follows: IceKreme sold all machines at $6,000 per unit All of iceKreme's sales were on credit with terms 2/10, 1/30. IceKreme's records included the following items and their balances as at March 31, 2020: Accounts receivable Allowance of doubtful accounts (credit balance) Net sales $ 72,000 22,200 720,000 2. The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: (Hint: Use a timeline to keep track of accounts receivable in order to determine the age of these receivables.) Aging of accounts receivable Not yet 1-30 days due past due Estimated & uncollectible 31-60 days Over 60 days past due past due 154 204 5% 104 a. Determine the amount of receivables that may not be collectible in the future as on June 30, 2020. Amount of uncollectible b. Prepare the journal entry to record bad debt expense at June 30, 2020, the company's fiscal year-end, if no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet