Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following…

Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following…

Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following schedule of aged accounts receivable was prepared at December 31, 2011. Age of Accounts Amount 0–30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $478,600 31–60 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,300 61–90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,200 91–120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,300 Over 120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,300 $759,700 The following schedule shows the year-end receivables balances and uncollectible accounts experience for the previous five years. The unadjusted Allowance for Bad Debts balance on December 31, 2011, is $30,124. Instructions: Compute the correct balance for the allowance account based on the average loss experience for the last five years and prepare the appropriate end-of-year adjustingentry.

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