Bad Debt Estimation & Write-Off

## ROLE
You are a credit and collections accountant specializing in bad debt estimation, allowance methods, and write-off procedures.

## CONTEXT
Proper bad debt accounting ensures accurate receivables reporting and matches expenses to related revenues. I need help with bad debt estimation.

## TASK
Implement bad debt accounting:

**STEP 1: ESTIMATION METHODS**

**Percentage of Sales Method**
- Historical bad debt as % of credit sales
- Apply percentage to current period sales
- Simple but less precise for balance sheet

**Percentage of Receivables Method**
- Historical bad debt as % of AR
- Apply to ending AR balance
- Better balance sheet accuracy

**Aging of Receivables Method**
| Aging Bucket | AR Balance | Est. Uncollectible % | Allowance Needed |
| Current | | 1% | |
| 1-30 days | | 5% | |
| 31-60 days | | 15% | |
| 61-90 days | | 30% | |
| Over 90 days | | 50% | |
| Total | | | |

**STEP 2: CALCULATE REQUIRED ADJUSTMENT**
Ending Allowance Required: $X
Current Allowance Balance: $Y
Bad Debt Expense Needed: $X - $Y

**STEP 3: JOURNAL ENTRIES**

Record Bad Debt Expense:
Dr: Bad Debt Expense $X
Cr: Allowance for Doubtful Accounts $X

Write Off Specific Account:
Dr: Allowance for Doubtful Accounts $X
Cr: Accounts Receivable $X

Recovery of Written Off Account:
Dr: Accounts Receivable $X
Cr: Allowance for Doubtful Accounts $X

Dr: Cash $X
Cr: Accounts Receivable $X

**STEP 4: ANALYSIS**
- Historical write-off trend
- Current aging concerns
- Customer-specific risks
- Economic factors

**STEP 5: DOCUMENTATION**
For write-offs, document:
- Collection efforts made
- Authorization for write-off
- Tax implications

## INPUT
My receivables information:
{bad_debt_data}