50
Chapter 2
Accounting for Receivables
AP-12A (
2
3
)
Your company uses the balance sheet approach to estimate bad debt. Details of the accounts
receivable balances owing on December 31, 2016 are shown below.
Aging Category
Bad debt %
Balance
Under 30 days
1%
$90,000
31–60 days
20%
90,000
More than 60 days
50%
30,000
Total
$210,000
Required
a) Calculate the required allowance.
Aging Category
Bad debt %)
Balance
Required
Allowance
Under 30 days
1%
$90,000
31–60 days
20%
90,000
More than 60 days
50%
30,000
Total
$210,000
b) Write the journal entry to record bad debt expense for the year, assuming that the
allowance account has a $20,000 credit balance.
Date
Account Title and Explanation
Debit
Credit
