Aging Receivables and Bad Debt Expense Perkinson Corporation sells paper products to a large number...
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Accounting
Aging Receivables and Bad Debt Expense
Perkinson Corporation sells paper products to a large number of retailers. Perkinson's accountant has prepared the following aging schedule for its accounts receivable at the end of the year.
| Accounts Receivable Category | Amount | Proportion Expected to Default | ||
| Within discount period | $384,500 | 0.004 | ||
| 130 days past discount period | 187,600 | 0.015 | ||
| 3160 days past discount period | 41,800 | 0.085 | ||
| Over 60 days past discount period | 21,400 | 0.200 | ||
Before adjusting entries are entered, the balance in the allowance for doubtful accounts is a debit of $7,405.
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