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Company uses the aging approach to estimate bad debt expense. The ending balance of each...

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Accounting

Company 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 yet due, $35,000,(2) up to 90 days past due, $12,500, and (3) more than 90 days past due, $7,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1)5 percent, (2)15 percent, and (3)21 percent, respectively. At December 31, Year 1(the end of the current year), the Allowance for Doubtful Accounts balance is $4,500(credit) before the end-of-period adjusting entry is made. What amount should be recorded as Bad Debt Expense for the current year? Assume that no account receivable needs to be written off. In addition, prepare an adjusting entry.
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