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Sagot :
Answer:the appropriate amount of Bad Debt Expense=$870
Explanation:
Given that for Lightning Inc., at the end of December:
Credit Sales $60,000
Accounts Payable 10.000
Accounts Receivable 7.000
Allowance for Uncollectible Accounts 400
creditCash Sales 20,000
Using the aging method and estimates it states that the following would be uncollectible
1. 2% of accounts receivable not yet due, $3500 which is
2 % x 3500= $70
2. 10% of receivables less than 30 days past due, $2000 which is
10% x 2000=$200
3. 40% of receivables greater than 30 days past due,$1500 which is
40% x$1500=$600
Appropriate amount of Bad Debt Expense= Allowance for Uncollectible Accounts =$70+$200+$600==$870
Therefore, Bad debt expense =$870
Allowance for Uncollectible Accounts=$870
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