Exercise 8-5 Vaughn Manufacturing has accounts receivable of $97,900 at March 31

Question

Exercise 8-5 Vaughn Manufacturing has accounts receivable of $97,900 at March 31, 2017. Credit terms are 2/10, n/30. At March 31, 2017, there is a $1,951 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Balance, March 31 Estimated Percentage Age of Accounts 2017 2016 Uncollectible Current 1-30 days past due 12,000 7,26 31-90 days past due 9,900 2,500 Over 90 days past due 7,000 1,060 $69,000 $80,200 2% 28 53 $97,900 $91,020 Determine the total estimated uncollectibles. The total estimated uncollectibles SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE

Explanation / Answer

Age group Estimated amount uncollectible Current 1380 =69000*2% 0-30 days 600 =12000*5% 31-90 days 2772 =9900*28% More than 90 days 3710 =7000*53% Total estimated uncollectible 8462 2 Bad debts expense 6511 =8462-1951       Allowance for uncollectible accounts 6511

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