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Firefox File Edit View History Bookmarks Tools window Help () 10% D, Sun 9:35 PM QE INI Topic: Report SAMPLE FLEE .: Monitoring you | VV WileyPLUS Cullum ber Com © Chegg Study 20 Benefits ofG What Is GPS? https://edugenwileyplus.com/edugen/studentimainfr.uni WilleyPLUS: MyWlleyPLUSI Help Contact Us | Log Out WileyPLUS Kieso, Intermediate Accounting, 16e INTERMEDIATE ACCOUNTING I & II (ACCT 350/351) Home Read, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Assignment> Open Assignment CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Problem 7-3 (Part Level Submission) Chapter 7 Homework Sage Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Sage's Accounts Receivable account was $593,600 and Allowance for Doubtful Accounts had a credit balance of $43,020. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below Exercise 7.4 Probability of Collection Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days Amount $312,400 118,400 87,700 41,800 19,200 14,100 Exercise 7-14 (Part 0.97 0.90 0.86 0.80 0.56 0.00 ubmission Exercise 7-19 (Part Level Submission) Problem 7-3 (Part Level Proble 7-8 Revicw Score Review Results by Study Objective Assume that accounts with a zero percent chance of collection are intended to be written off (a) What is the approplate balance for Allowance for Doubtful Accounts at year-end? Balance for Allowance for Doubtful Accounts LINK TO TEXT

Explanation / Answer

Solution: Calculation of balance for Allowance for Doubtful Accounts:

Note: The accounts which have been outstanding over 75 days ($14,100) and have zero probability of collection would be written off immediately by a debit to Allowance for Doubtful Accounts for $14,100 and a credit to Accounts Receivable for $14,100. It is not considered when determining the proper amount for the Allowance for Doubtful Debts.

Days Account outstanding Amount ($) Probability of collection Doubtful accounts($) Less than 16 days 312,400 0.97 9,372 Between 16 and 30 days 118,400 0.90 11,840 Between 31 and 45 days 87,700 0.86 12,278 Between 46 and 60 days 41,800 0.80 8,360 Between 61 and 75 days 19,200 0.56 8,448 Over 75 days 14,100 0.00 ------ Balance for Allowance for Doubtful Debts 50,298

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