A summary of Klugman Company accounts receivable aging schedule is presented bel
ID: 2462885 • Letter: A
Question
A summary of Klugman Company accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:
Age Group
Amount
%
0-60 days
$60,000
0.5%
61-90 days
$22,000
1%
91-120 days
$3,000
10%
Over 120 days
$1,000
50%
The allowance for uncollectible accounts had a balance of $1,400 at the end of the year.
Calculate the following amounts for
1. Expected bad debt expense
2. Total balance in accounts receivable
3. Net realizable value accounts receivable
Age Group
Amount
%
0-60 days
$60,000
0.5%
61-90 days
$22,000
1%
91-120 days
$3,000
10%
Over 120 days
$1,000
50%
Explanation / Answer
Age Group Amount % Uncollectible 0-60 days $60,000 0.50% $300.00 61-90 days $22,000 1% $220.00 91-120 days $3,000 10% $300.00 Over 120 days $1,000 50% $500.00 $86,000.00 $1,320.00 Expected Bad Debt Expense= 1400+1320 = $ 2,720.00 Total Balance in accounts receivable= $ 86,000.00 Net realizable value Accounts Receivable= 86000-1320 = $ 84,680.00
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