E5.17Preparing an Aging Schedule. East Bay Inc. uses the aging method to estimate the company's bad debtexpense. Mark Evans, the president of the company, collected information about the company's outstandingaccounts receivable and their probability of collection:TA 4Probability ofNon-CollectionAccount AgeAmount0-30 days.31-60 days.61-90 days.91-120 days.Over 120 days$600,000300,000150,0000.75%....2.003.0090,0005.0050,00030.00Calculate the allowance for uncollectible accounts for East Bay, Inc., the total balance in accounts receivable,and the net realizable value of the company's accounts receivable. Assume that East Bay, Inc. adopts a policyof writing off as worthless all unpaid accounts receivable over 120 days old. How will implementation of thispolicy impact the net realizable value of the company's accounts receivable? Why?

Given, Accounts receivable with their age Estimated Uncollectible (%) With this given…

E5.17 Preparing an Aging Schedule. East Bay Inc. uses the aging method to estimate the company's bad debt expense. Mark Evans, the president of the company, collected information about the company's outstanding accounts receivable and their probability of collection: Probability of Non-Collection Account Age Amount 0-30 days. 31-60 days. 61-90 days. 91-120 days. Over 120 days $600,000 300,000 150,000 90,000 50,000 0.75% 2.00 3.00 5.00 30.00 Calculate the allowance for uncollectible accounts for East Bay, Inc., the total balance in accounts receivable, and the net realizable value of the company's accounts receivable. Assume that East Bay, Inc. adopts a policy of writing off as worthless all unpaid accounts receivable over 120 days old. How will implementation of this policy impact the net realizable value of the company's accounts receivable? Why?

E5.17 Preparing an Aging Schedule. East Bay Inc. uses the aging method to estimate the company's bad debt expense. Mark Evans, the president of the company, collected information about the company's outstanding accounts receivable and their probability of collection: Probability of Non-Collection Account Age Amount 0-30 days. 31-60 days. 61-90 days. 91-120 days. Over 120 days $600,000 300,000 150,000 90,000 50,000 0.75% 2.00 3.00 5.00 30.00 Calculate the allowance for uncollectible accounts for East Bay, Inc., the total balance in accounts receivable, and the net realizable value of the company's accounts receivable. Assume that East Bay, Inc. adopts a policy of writing off as worthless all unpaid accounts receivable over 120 days old. How will implementation of this policy impact the net realizable value of the company's accounts receivable? Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 6EA: Millennium Associates records bad debt using the allowance, balance sheet method. They recorded...

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