Mellon Corporation
The data presented below is for Mellon Corporation for the year ended December 31, 2015:
-Refer to the data for Mellon Corporation.
If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015?

Question

Mellon Corporation
The data presented below is for Mellon Corporation for the year ended December 31, 2015: 
-Refer to the data for Mellon Corporation.
If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015?

Quizplus · Accepted Answer

The aging of accounts receivable approach estimates bad debt expense based on the age of the accounts receivable. The data shows that Mellon has $28,000 of accounts receivable that are over 90 days old. According to the aging schedule, 5% of accounts receivable over 90 days old are estimated to be uncollectible. Therefore, Mellon will report $28,000 * 5% = $1,400 of bad debt expense for 2015.

Mellon Corporation the Data Presented Below Is for Mellon Corporation for the for the Year