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ts. Before any year-enc oubtful Accounts had Accounts will be based

ts. Before any year-enc oubtful Accounts had Accounts will be based

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kingbird Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Kingbird's Accounts Receivable account was $591,900 and Allowance for Doubtful Accounts had a credit balance of $44,990. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Days Account Outstanding Amount Collection Less than 16 days $314,500 0.98 Between 16 and 30 days 112,400 0.90 Between 31 and 45 days 85,000 0.86 Between 46 and 60 days 44,200 0.79 Between 61 and 75 days 19,900 0.55 Over 75 days (to be written off) 15,900 0.00
Transcribed Image Text:Kingbird Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Kingbird's Accounts Receivable account was $591,900 and Allowance for Doubtful Accounts had a credit balance of $44,990. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Days Account Outstanding Amount Collection Less than 16 days $314,500 0.98 Between 16 and 30 days 112,400 0.90 Between 31 and 45 days 85,000 0.86 Between 46 and 60 days 44,200 0.79 Between 61 and 75 days 19,900 0.55 Over 75 days (to be written off) 15,900 0.00
(a) Your answer is incorrect. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for Allowance for Doubtful Accounts $ eTextbook and Media Save for Later Attempts: 3 of 4 used Submit Answer
Transcribed Image Text:(a) Your answer is incorrect. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for Allowance for Doubtful Accounts $ eTextbook and Media Save for Later Attempts: 3 of 4 used Submit Answer
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