Estimating Doubtful Accounts Easy Rider International is a wholesaler of motorcy

Question

Estimating Doubtful Accounts

Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's Receivables created by selling merchandise or services on credit.accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Estimate what the balance of the The contra asset account for accounts receivable.allowance for doubtful accounts should be as of December 31, 20Y3. Enter your answers as positive amounts.

Age Interval Balance Percent
Uncollectible Not past due $422,000 2 % 1–30 days past due 157,300 6 31–60 days past due 64,400 20 61–90 days past due 35,800 30 91–180 days past due 35,700 45 Over 180 days past due 18,800 65 $734,000

Explanation / Answer

Allowance for doubtful accounts should be as of December 31, 20Y3

Age Interval Working Estimated Uncollectible Amount ($) Not past due 422,000 * 2 % 8,440 1-30 days past due 157,300 * 6 % 9,438 31-60 days past due 64,400 *20 % 12,880 61-90 days past due 35,800* 30 % 10,740 91-180 days past due 35,700 * 45 % 16,065 Over 180 days past due 18,800 * 65 % 12,220 Total 69,783

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