The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 60,000 Accounts Payable 10,000 Accounts Receivable 7,000 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 2% of accounts receivable not yet due, 10% of receivables up to 30 days past due, and 40% of receivables greater than 30 days past due. The accounts receivable balance of $7,000 consists of $3,500 not yet due, $2,000 u

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Question:

the following information pertains to Lightning Inc., at the end of December: Credit Sales $ 60,000 Accounts Payable 10,000 Accounts Receivable 7,000 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 2% of accounts receivable not yet due, 10% of receivables up to 30 days past due, and 40% of receivables greater than 30 days past due. The accounts receivable balance of $7,000 consists of $3,500 not yet due, $2,000 up to 30 days past due, and $1,500 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense

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Answer:the appropriate amount of Bad Debt Expense=$870Explanation: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=$870s

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