FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Estimating Doubtful Accounts
Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate the proper balance of the allowance for doubtful accounts should be as of December 31.
Performance Bike Co.
Estimation of Uncollectible Accounts
December 31
Estimated Uncollectible
Age Interval
Balance
Accounts Percent
Not past due
$888,000
1/2%
1-30 days past due
97,700
2
31-60 days past due
44,400
7
61-90 days past due
32,000
18
91-180 days past due
23,100
42
Over 180 days past due
16,900
65
Total
$1,102,100
Estimated Uncollectible
Accounts Amount
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Transcribed Image Text:Estimating Doubtful Accounts Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Estimate the proper balance of the allowance for doubtful accounts should be as of December 31. Performance Bike Co. Estimation of Uncollectible Accounts December 31 Estimated Uncollectible Age Interval Balance Accounts Percent Not past due $888,000 1/2% 1-30 days past due 97,700 2 31-60 days past due 44,400 7 61-90 days past due 32,000 18 91-180 days past due 23,100 42 Over 180 days past due 16,900 65 Total $1,102,100 Estimated Uncollectible Accounts Amount
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