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Prepare the journal entry to record bad debt expense

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Reference no: EM131747389

Bad Debt Expense: Aging Method

Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year.


Accounts Receivable		 Age
Amount		 Proportion Expected
to Default		 Allowance
Required
Current $310,500   0.005   $1,553  
1-30 days past due 47,500   0.01   475  
31-45 days past due 25,000   0.13   3,250  
46-90 days past due 12,800   0.20   2,560  
91-135 days past due 6,100   0.25   1,525  
Over 135 days past due 4,200   0.60   2,520  
          $11,883  

The balance in Glencoe's allowance for doubtful accounts at the beginning of the year was $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off.

Required:

1.  Determine bad debt expense.

2.  Prepare the journal entry to record bad debt expense.

3.  By how much would bad debt expense reported on the statement of earnings have changed if Glencoe had written off $90,000 of receivables as uncollectible during the year?

Reference no: EM131747389

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