Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Lennon Electronics had an accounts receivable balance of $29,800 and a balance in the allowance for doubtful accounts of $2,425 (credit). During the year, Lennon had credit sales of $752,693, collected accounts receivable in the amount of $653,800, wrote off $20,400 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Proportion Expected Category Amount to Default Current $22,700 0.01 1-15 days past due 8,600 0.04 16-45 days past due 4,900 0.09 46-90 days days past due 3,200 0.17 Over 90 days past due 2,100 0,30 $41,500 Lennon has a December 31 year-end. Required: 1. Determine the desired postadjustment balance in allowance for doubtful accounts. Round amounts to nearest dollar for each aging category. 2. Determine the preadjustment balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense. (Record adjusting entry for ba debt expense estimate)

Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Lennon Electronics had an accounts receivable balance of $29,800 and a balance in the allowance for doubtful accounts of $2,425 (credit). During the year, Lennon had credit sales of $752,693, collected accounts receivable in the amount of $653,800, wrote off $20,400 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Proportion Expected Category Amount to Default Current $22,700 0.01 1-15 days past due 8,600 0.04 16-45 days past due 4,900 0.09 46-90 days days past due 3,200 0.17 Over 90 days past due 2,100 0,30 $41,500 Lennon has a December 31 year-end. Required: 1. Determine the desired postadjustment balance in allowance for doubtful accounts. Round amounts to nearest dollar for each aging category. 2. Determine the preadjustment balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense. (Record adjusting entry for ba debt expense estimate)

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Description: Determining Bad Debt Expense Using the Aging MethodAt the beginning of the year, Lennon Electronics had an accounts receivable balance of $29,800 and abalance in the allowance for doubtful accounts of $2,425 (credit). During the year, Lennon had cre

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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