Black lantern company uses the aging approach to estimate


Black Lantern Company uses the aging approach to estimate bad debt expense. The total Accounts Receivable balance at year end is $92,300. The balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $57,000, (2) up to 180 days past due, $33,000, and (3) more than 180 days past due, $2,300. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to un collectability is (1) 3 percent, (2) 13 percent, and (3) 24 percent, respectively. At December 31, 2014 (end of the current year), the Allowance for Doubtful Accounts balance is $600 (credit) before the end-of-period adjusting entry is made. 1)Prepare the appropriate bad debt expense adjusting entry for the year 2014. 2) Show how the entry above would be posted to the following related T accounts. Reflect the proper balances in each account 3) Show how accounts receivable should be shown on the December 31, 2014,balance sheet. 

Request for Solution File

Ask an Expert for Answer!!
Financial Accounting: Black lantern company uses the aging approach to estimate
Reference No:- TGS01227185

Expected delivery within 24 Hours