(Using an aging schedule to calculate the bad debt expense, LO 3) Examine the following information about Weyakwin Inc. (Weyakwin):

i. Ending balance in Allowance for Uncollectable Accounts on April 30, 2005 =

$16,950 (credit balance).

ii. Accounts receivable written off during the year ended April 30, 2006 = $14,500.
iii. Aging schedule for accounts receivable outstanding on April 30, 2006:

Required:

a. What amount of closing accounts receivable is estimated to be uncollectable on April 30, 2006?

b. Prepare the journal entry required to record the bad debt expense for Weyakwin for the year ended April 30, 2006.

c. What are some possible explanations for the change in the allowance account between April 30, 2005 and April 30, 2006?

Transcribed Image Text:

Account age Current 1-30 days overdue Balance on April 30, 2006 Percent estimated to be uncollectable $72,000 3% 28,000 6% 31-60 days overdue 15,000 12% 61-120 days overdue 10,000 40% More than 120 days overdue 15,000 80%