170. A company has the following unadjusted account balances at December 31, of

Question

170. A company has the following unadjusted account balances at December 31, of the current year Accounts Receivable of $183,400 and Allowance for Doubtful Accounts of $1,600 (credit balance). The company uses the aging of accounts receivable to estimate its bad debts. The following aging schedule reflects its accounts receivable at the current year-end: Estimated Uncollectible Balance Percentage Account Age 106,000 Current (not yet due) -30 days past due 30-60 days past due 61-90 days past due Over 90 days past due Total 2.0% 54,000 4.0%) 12,000! 10.0% -25.0% 8,500 | 2.900| 75.0%, 183400 Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, of the current year, balance sheet.

Explanation / Answer

Balance Estimated uncollectible Account age uncollectible amount percentage current (not yet due) 106,000 2% 2120 1-30 days past due 54,000 4% 2160 30-60 days past due 12,000 10% 1200 61-90 days past due 8,500 25% 2125 over 90 days past due 2,900 75% 2175 total 183,400 9780 Allowance for doubtful accounts that should appear on the December 31, of the current year ,balance sheet    $9,780

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