49
Chapter 2
Accounting for Receivables
c)
What are the net accounts receivable at the end of 2016?
AP-11A (
2
3
)
The following chart is prepared by the accountant of Happy Shoes. The percentages are based
on historical performance.
Aging Category
Bad Debt %
Balance
30 days
1%
$80,000
31–60 days
3%
40,000
More than 60 days
5%
20,000
Total
$140,000
Happy Shoes uses the balance sheet approach to estimate uncollectible receivables.
Required
a) Calculate the company’s bad debt.
Aging Category
Bad Debt % Balance
Estimated Bad
Debt
b) Assume that allowance for doubtful accounts has a credit balance of $1,000. Calculate the
amount of bad debt expense the company will record.
