Alpha Company uses aging of Accounts Receivable to estimate uncollectible. The u

Question

Alpha Company uses aging of Accounts Receivable to estimate uncollectible. The unadjusted Trial Balance amount of Accounts Receivable on December 31, 2016, has a balance that consists of Days outstanding Amount Estimated Uncollectible 0-60 $300,000 1% 61-120 90,000 2% Over 120 100,000 6% Total $490,000 Activity during Fiscal Year 2016, for Alpha Company consisted of: July 15 Alpha wrote of the Bravo Zulu Company account as not collectable for the amount of $8,500. Oct. 20 Alpha company recovered $5,500 from the Chartie Delta Company for settlement of their prior debt that had been written off during FY 2015. Alpha Company's December 31,2015 allowance for uncollectible accounts was $2,700. Under the aging method, what amounts should Alpha Company report at December 31, 2016 for:

Explanation / Answer

Solution :-

Allowance for Uncollectible Account :-

Bad Debt Account :-

Answer is :-

Allowance for uncollectible Account = $10800

Bad Debt Account = $11100

Day outstanding Amount ($) Estimated Uncollectible Uncollectible Amount ($) 0 - 60 300000 1% 3000 61 - 120 90000 2% 1800 Over 120 100000 6% 6000 Total 490000 10800

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