133k views
5 votes
An aging of Lily Company’s accounts receivable as of December 31 revealed the following. Amount % Uncollectible Current $20,000 2% 1-30 days 50,000 4% 31-60 days 30,000 7% Over 60 days 10,000 25% Before any adjustment for the current year’s bad debts, Lily Company has a balance in its allowance for bad debts of $3,000; this $3,000 represents the remaining allowance associated with accounts receivable created in prior years. Lily Company uses the aging method of estimating bad debt expense. What is BAD DEBT EXPENSE for THIS year?

User Holin
by
5.8k points

1 Answer

3 votes

Answer:

What is BAD DEBT EXPENSE for THIS year?

4000

Step-by-step explanation:

Aging

Current 20000 2% 400

1-30 50000 4% 2000

31-60 30000 7% 2100

Over 60 10000 25% 2500

7000

Allowance bad debts 3000

Expense 4000

User Odwori
by
4.6k points