Estimating Allowance for Doubtful Accounts Thunderwood Industries has a past his

Question

Estimating Allowance for Doubtful Accounts

Thunderwood Industries has a past history of uncollectible accounts , as shown below

Age Class                  Percent Uncollectible

Balance                                                                         833,000     = Allowance for doubtful account ____________.

Not past                                2%           Total received 488,000      = Allowance for doubtful account ____________.

1-30 days past due               6 %           Total received 166,500      = allowance for doubtful account ____________.

31 - 60 days past due           12%           Total received 96,000       = Allowance for doubtful Account ____________.

61 -90 days past due              30%          Total received 43,000        = Allowance for doubtful Account ____________.

Over 90 days past due            75 %           Total received 40,000      = Allowance for doutful Account _____________.

Explanation / Answer

Age Class Percentage uncollectible   Total received Allowance for doubtful accounts= Received/(1-%Uncollectible) * % Uncollectible Balance             833,500.00 Not Past Due 2.00%           488,000.00                    9,959.18 Days Past Due 1-30   6.00%           166,500.00                 10,627.66 Days Past Due 31-60 12.00%              96,000.00                 13,090.91 Days Past Due 61-90 30.00%              43,000.00                 18,428.57 Days Past Due Over 90 75.00%              40,000.00               120,000.00

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