68
Chapter 2
Accounting for Receivables
b) Prepare the journal entry to record bad debt expense for the year.
Date
Account Title and Explanation
Debit
Credit
AP-13B (
2
3
)
Williams Canada operates in an industry that has a high rate of bad debts. Before the year-
end adjustments on April 30, Williams Canada’s accounts receivable has a debit balance of
$485,000 and the allowance for doubtful accounts has a credit balance of $15,700. The year‐
end balance reported on the balance sheet for the allowance for doubtful accounts is based
on the aging schedule shown below.
Required
a) Fill in the table to calculate the balance for the allowance for doubtful accounts.
Aging Category
Bad Debt % Balance Estimated Bad
Debt
Less than 16 days
2%
$270,000
16–30 days
4%
$84,000
31–45 days
7%
$71,000
46–60 days
12%
$30,000
61–75 days
21%
$17,000
More than 75 days
44%
$13,000
Total
$485,000
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