Reference no: EM132475137

Blue Water equipment company uses the aging approach to estimate bad debt expense at the end of each accounting year. The balance of each account receivable is aged on the basis of three time periods as follows:

1) Not yet due, 192,000

2) Up to one year past due

3) More than one year past due

Experience has shown that for each age group, the average loss rate on the amount of the receivable at year end due to the inability to collect is:

1) 1 percent

2) 3.5 percent

3) 15 percent

At December 31, 2018 the allowance for doubtful account balance was 1840

Question 1: Determine the amount of bad debt expense that should be reported on the income statement