-Refer to the data for Benton Corporation.
If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2015?

Question

Quizplus · Accepted Answer

The aging approach estimates bad debts by analyzing the length of time accounts have been outstanding and the likelihood of payment. Based on the data provided, the total accounts receivable balance that is over 90 days past due is 70,000 + 55,000 = $125,000. Applying the estimated percentage of uncollectible accounts of 9.2% (based on previous experience), the amount of bad debt expense to record for 2015 would be $125,000 x 9.2% = $11,500.

-Refer to the Data for Benton Corporation