Papscoe Inc. uses the accounts receivable aging method to estimate uncollectible
ID: 2390587 • Letter: P
Question
Papscoe Inc. uses the accounts receivable aging method to estimate uncollectible accounts. On February 1, 2010, the balance of the Accounts Receivable account was a debit of $673,622, and the balance of Allowance for Uncollectible Accounts was a credit of $75,400. During the year, the store had sales on account of $6,361,000, sales returns and allowances of $49,000, worthless accounts written off of $96,675, and col- lections from customers of $5,905,787. As part of the end-of-year (January 31, 2011) procedures, an aging analysis of accounts receivable is prepared. The analysis, which is partially complete, is as follows: Papscoe ?nc Aging Analysis of Accounts Receivable 1-30 31-60 61-90 Over Days Not Yet Days 90 Days Due Past Due Past Due Past Due Past Due Days Total Balance Forward $924,913 $537,422 $175,222 $110,633 $49,473 $52,163 To finish the analysis, the following accounts need to be classified: Due Date Amount 27 $21,222 6,123 January 4 February 13 x December 18 JONES TELLIER SUNDBERG GILFILLEN BEGLEY RUSSELL SHANAHAN 8,789 March 22-last year 789 2,275 October 15 12,716 January 6 90+ 25 74 90+ 6,333 November 18 Total Owed $58,247 Your completed aging analysis should total $983,160 ($924,913+58,247) and needs to be confirmed in requirement on the appropriate worksheet. The year end in January 31 and not December 31. Age accordingly Requirements: 1. Complete the aging analysis of accounts receivable. 2. Compute the end-of-year balances (before adjustments) of Accounts Receivable and Allowance for Uncollectible Accounts. 3. Prepare an analysis computing the estimated uncollectible accounts. 4. How much is Papscoe estimated uncollectible accounts expense for the year? Note: Round the adjustment to the nearest whole dollar. Percentages deemed uncollectible are supplied on Page 12Explanation / Answer
Answers
Customer Account
Total
Not yet due
1-30 days past due
31-60 days past due
61-90 days past due
Over days past due
Balance Forward
$ 9,24,913.00
$ 5,37,422.00
$ 1,75,222.00
$ 1,10,633.00
$ 49,473.00
$ 52,163.00
Jones
$ 21,222.00
$ 21,222.00
tellier
$ 6,123.00
$ 6,123.00
Sundbreg
$ 789.00
$ 789.00
GilFillen
$ 2,275.00
$ 2,275.00
Begley
$ 12,716.00
$ 12,716.00
Russel
$ 6,333.00
$ 6,333.00
Shanahan
$ 8,789.00
$ 8,789.00
$ 9,83,160.00
$ 5,43,545.00
$ 2,09,160.00
$ 1,11,422.00
$ 55,806.00
$ 63,227.00
Accounts Receivables
Beginnning Balance
$ 6,73,622.00
Credit Sales
$ 63,61,000.00
Subtotal
$ 70,34,622.00
Less: Sales return & Allowances
$ 49,000.00
Accounts written off
$ 96,675.00
Collection from Customers
$ 59,05,787.00
$ (60,51,462.00)
Ending Balance
$ 9,83,160.00
Allowance for Uncollectible Accounts
Beginning Credit balance
$ 75,400.00
Less: Accounts written off
$ 96,675.00
Debit Balance at the end of Year
$ 21,275.00
Amount
% considered uncollectible
Allowance for Uncollectible Account
[A]
[B]
[A x B]
Not yet due
$ 5,43,545.00
2%
$ 10,871
1-30 days past due
$ 2,09,160.00
5%
$ 10,458
31-60 days past due
$ 1,11,422.00
15%
$ 16,713
61-90 days past due
$ 55,806.00
25%
$ 13,952
Over days past due
$ 63,227.00
50%
$ 31,614
$ 9,83,160.00
$ 83,607
Desired Balance
$ 83,607.20
Debit Balance in Allowance Account
$ 21,275.00
Amount of Expense
$ 1,04,882.20
Customer Account
Total
Not yet due
1-30 days past due
31-60 days past due
61-90 days past due
Over days past due
Balance Forward
$ 9,24,913.00
$ 5,37,422.00
$ 1,75,222.00
$ 1,10,633.00
$ 49,473.00
$ 52,163.00
Jones
$ 21,222.00
$ 21,222.00
tellier
$ 6,123.00
$ 6,123.00
Sundbreg
$ 789.00
$ 789.00
GilFillen
$ 2,275.00
$ 2,275.00
Begley
$ 12,716.00
$ 12,716.00
Russel
$ 6,333.00
$ 6,333.00
Shanahan
$ 8,789.00
$ 8,789.00
$ 9,83,160.00
$ 5,43,545.00
$ 2,09,160.00
$ 1,11,422.00
$ 55,806.00
$ 63,227.00
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