Answer:
Lightning Inc.
Computation of Bad Debts Expense:
7% of $7,500 =   $525
21% of $1,600 =    336
46% of $1,300 =   598
Total                 $1,459
Explanation:
a) Data and Calculations:
Credit Sales $ 20,000 
Accounts Payable 10,000 
Accounts Receivable 10,400 
Allowance for Uncollectible Accounts 400 credit 
Cash Sales 20,000 
Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 21% of receivables up to 30 days past due, and 46% of receivables greater than 30 days past due.
The accounts receivable balance of $10,400 consists of $7,500 not yet due, $1,600 up to 30 days past due, and $1,300 greater than 30 days past due.
Age Analysis of Accounts Receivable balance of $10,400
                   Not yet due     up to 30 days         greater than 30
                                                past due              days past due
Percentage         7%                         21%                  46%
Balance           $7,500                  $1,600               $1,300
Bad debts          $525                     $336                 $598
Bad debts Expense = $1,459