Reynolds Company has credit sale of $4,500,000 for the year 2018. At December 31, 2018, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $3,400. Reynolds prepares a schedule of its December 31, 2018 accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized as follows:

DECEMBER 31, 2018		AGE OF		EXPECTED PERCENT
ACCOUNTS RECEIVABLE		ACCOUNTS RECEIVABLE		UNCOLLECTIBLE
$396,400		NOT YET DUE		2.00%
277,800		1 - 30 DAYS PAST DUE		4.00%
48,000		31-60 DAYS PAST DUE		8.50%
6,600		61-90 DAYS PAST DUE		39.00%
2,800		OVER 90 DAYS PAST DUE		82.00%

1. Determine the ending balance of the Allowance for Doubtful Accounts

2. Determine the Bad Debt Expense

3. Prepare (in proper order and form) the necessary journal entry to record Bad Debt Expense.

Answer rating: 100% (QA)

To determine the ending balance of the Allowance for Doubtful Accounts and the Bad Debt Expense we n... View the full answer