Transcribed Image Text: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Lennon Electronics had an accounts receivable balance of

Best Writers accounting, business-managerial-accounting Transcribed Image Text: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Lennon Electronics had an accounts receivable balance of

accounting, business-managerial-accounting

Transcribed Image Text: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Lennon Electronics had an accounts receivable balance of

Transcribed Image Text: 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 bad debt expense estimate)

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