Determine the desired postadjustment balance in allowance

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Reference no: EM13939054

AGING METHOD BAD DEBT EXPENSE

Cindy Bagnal, the manager of Cayce Printing Service, has provided you with the follow- ing aging schedule for Cayce's accounts receivable:

Accounts

Receivable Category Amount

Proportion Expected to Default

0-20 days	$ 88,200	0.02
21-40 days	21,500	0.08
41-60 days	11,700	0.15
Over 60 days	5,300	0.30
	$126,700

Cindy indicates that the $126,700 of accounts receivable identified in the table does not include $8,900 of receivables that should be written off.

Required:

1. Journalize the $8,900 write-off.

2. Determine the desired postadjustment balance in allowance for doubtful accounts.

3. If the balance in allowance for doubtful accounts before the $8,900 write-off was a debit of $450, compute bad debt expense.

Reference no: EM13939054

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