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Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance...

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Accounting

Brown Cow Dairy 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 due yet, $18,000; 2. Up to 120 days past due $4000; and 3. more than 120 days due to uncollectibility is (a.) 3 percent, (b.) 13 percent, and (c.) 20 percent. At December 31, (end of year) the Allowance for Doubtful Accounts balance is $810 (credit) before the end-of- period adjusting entry is made.

Data during the current year:

a. During Dec. an Account Receivable (Patty's Bake Shop) of $760 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt.

b. On Dec 31, the appropriate adjusting entry for the year was recorded.

Required:

image Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet for the current year. Disregard income tax considerations. (Amounts to be deducted should be indicated by a minus sign.)

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