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.